ABSTRACT
Efficiency and productivity change have long been the focus of banking research. Findings in relation to these topics have important implications for policy makers who are concerned about bank safety and soundness, as well as for bank managers who seek to improve operating performance. Considerable research has been conducted for the United States and European commercial banks; however, there have been comparatively few studies that have investigated banks in Asia (Berger and Humphrey, 1997; Isik and Hassan, 2003). This chapter contributes to the literature by comparatively analyzing the evolution of the technical efficiency and productivity change of commercial banks in two Asian economies, namely, Hong Kong and Macau, from 1995 to 2006.
