Impact of Deregulation on Patterns of Allocative Inefficiency in Pakistan’s Banking Sector

Ahmad, Shabbir (2011). Impact of Deregulation on Patterns of Allocative Inefficiency in Pakistan’s Banking Sector. In: 14th International Business Research Conference, Dubai, United Arab Emirates, (). 28-30 April 2011.

Author Ahmad, Shabbir
Title of paper Impact of Deregulation on Patterns of Allocative Inefficiency in Pakistan’s Banking Sector
Conference name 14th International Business Research Conference
Conference location Dubai, United Arab Emirates
Conference dates 28-30 April 2011
Publication Year 2011
Sub-type Fully published paper
Open Access Status
Language eng
Abstract/Summary This paper contributes to the literature on comparative efficiency of banks when the banks fail to minimize their costs , due to lack of effective competition in the banking industry. T his paper estimates allocative inefficiency in Pakistan’s banking sector by using data of commercial banks from 1991 to 2005 and by employing a generalized translog cost function. The findings of this paper suggest that the banks fail to minimize their costs because they sub - optimally use banking inputs due to which their ratio of actual and effective prices diverges significantly. Our results from pair - wise relative price efficiency suggest that input - mix in efficiency in Pakistan’s banking sector takes the form of over - utilization of deposits and under - utilization of operating expenses. Moreover, estimates of time - variant inefficiency suggest that over - utilization of banking inputs gradually comes closer to u nity or at a level where there is absence of allocative inefficiency. These results confirm that deregulation policies in Pakistan’s banking sector are successful to some extent in reducing mis - allocation of banking inputs.
Q-Index Code E1
Q-Index Status Provisional Code
Institutional Status Non-UQ
Additional Notes http://www.wbiconpro.com/603-shabbir.pdf

Document type: Conference Paper
Collection: School of Economics Publications
 
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Created: Wed, 07 May 2014, 14:41:09 EST by Michelle Rowland on behalf of School of Human Movement and Nutrition Sciences