Abstract
This article analyses the developments and main determinants of bank efficiency in the Mexican banking industry during 2001–2009. The Data Envelopment Analysis (DEA) methodology is applied to obtain efficiency estimates and then a Tobit model is run to find its main determinants. The first result indicates that the Mexican banking sector experienced average inefficiencies for the period of study of 15%, 29% and 14% for Technical Efficiency (TE), Pure Technical Efficiency (PTE) and Scale Efficiency (SE), respectively. Furthermore, the main determinants of increased bank efficiency are loan intensity, Gross Domestic Product (GDP) growth and foreign ownership.
Acknowledgements
The author thanks Alejandra Cañizares Tello for her valuable help. The views and conclusions presented in this article are exclusively of the author and do not necessarily reflect those of the Ministry of Finance.
Notes
1 Pineda Ortega (Citation2009) argues that from 2001 to 2006 the number of financial products offered from commercial banks has increased by 46% (from 132 to 192).
2 The number of bootstrap iterations was 1000.