Skip to main content

Threshold effects of financial status on the cost frontiers of financial institutions in nondynamic panels

Buy Article:

$53.17 plus tax (Refund Policy)


This article applies Hansen's (1999, 2000) threshold regression model to estimate translog cost frontiers in the hope of shedding light on the banking industry's production processes and the extent of its Technical Efficiency (TE). The threshold technique allows for the existence of multiple technologies of production, distinguished by an exogenous threshold variable. Strong evidence of multiple technologies is found in the industry irrespective of which financial indicator, as constructed by factor analysis, defines the threshold variable. Cost savings and scale economies among the various underlying technologies are compared herein. We also highlight the differences between the threshold results and the conventional cost frontier.

Document Type: Research Article


Affiliations: 1: Department of Banking and Finance, Tamkang University, 151 Ying-Chung Road, Tamsui, Taiwan, ROC 2: Department of Money and Banking, National Chengchi University, Taipei 116, Taiwan, ROC

Publication date: December 1, 2009

More about this publication?

Access Key

Free Content
Free content
New Content
New content
Open Access Content
Open access content
Subscribed Content
Subscribed content
Free Trial Content
Free trial content
Cookie Policy
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more