Banking Efficiency in Chile: a Profit Frontier Approach

José Luis Carreño G (1) , Gino Loyola (2) , Yolanda Portilla (3)
(1) , Chile
(2) , Chile
(3) , Chile

Abstract

This paper characterizes the evolution of the efficiency X in the Chilean banking industry over 1987 to 2007, based on a profit frontier approach. Our results suggest that over this period the Chilean banking sector has attained just a 15% over its maximum profits. This inefficiency basically arises from a technical source rather than an assignative one, and mainly affects domestic and small banks. Nevertheless, the level of efficiency X of the industry as a whole has dramatically improved since the late 1990’s, which is consistent with important economic, technological and regulatory transformations.


 

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Authors

José Luis Carreño G
Gino Loyola
Yolanda Portilla
G, J. L. C. ., Loyola , G. ., & Portilla, Y. . (2010). Banking Efficiency in Chile: a Profit Frontier Approach. ECONOMÍA CHILENA, 13(3), 33–65. https://doi.org/10.36923/economa.v13i3.140

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