4.3 Determinants of Cost and Profit Efficiency
The productivity index values are used to examine the sources of the cost and profit inefficiency performance of banks. This section reports new findings using the scores on technical efficiency and their relationship to specific banking variables. The maximum likelihood estimation of the parameters in the Cobb-Douglas equation and the translog stochastic frontier production function are used to obtain the results using the software package FRONTIER Version 4.1c (Coelli 1996).