Managers and Efficiency in Banking

Kauko, Karlo

doi:10.2139/ssrn.965677

Download This Paper

Open PDF in Browser

Add Paper to My Library

Managers and Efficiency in Banking

Bank of Finland Research Discussion Paper No. 11/2007

38 Pages Posted: 27 Feb 2007

See all articles by Karlo Kauko

Karlo Kauko

Bank of Finland

Date Written: March 1, 2007

Abstract

This paper presents evidence on the impact of managers on cost efficiency in banking. Stochastic frontier analysis is applied to a unique Finnish data set. The paper finds that manager age and education have strong yet complicated effects. University education enhances efficiency if the manager is running a large bank. Managing director changes are systematically followed by efficiency changes. Manager retirement typically causes an efficiency improvement, whereas other manager changes can either improve or weaken efficiency.

Keywords: efficiency, banking, managers

JEL Classification: G21, L25, M19

Suggested Citation: Suggested Citation

Kauko, Karlo, Managers and Efficiency in Banking (March 1, 2007). Bank of Finland Research Discussion Paper No. 11/2007, Available at SSRN: https://ssrn.com/abstract=965677 or http://dx.doi.org/10.2139/ssrn.965677