earticle

영어

In this study we estimate the progress or regress of the production frontier of the Korean savings banks for the period of FY2001-FY2009, by applying the Free-Disposal Hull method. We also analyze the effect of percentage of shareholding and types of largest owners, along with loan risk and other characteristics of savings banks, on the frontier change of the industry. Results show that the production frontier of the industry has improved significantly since FY2002 up to FY2006, and about 15-21% of banks had contributed to the progress of the frontier. However, the number of savings banks contributing to the progress has decreased since FY2007. We also find that savings banks with lower level in the percentage of largest shareholder and non-performing loan ratio, and higher level in BIS capital adequacy ratio, corporate loan ratio and secured loan ratio, have contributed to the progress of the frontier in the industry.