Input Variables

Output Variables

Cobb-Douglas Model

Summary results.


Barros & Grarcia (2007) . Analysing the performance of pension fund industry with a stochastic frontier model: A case study of Portugal.

Prices of labour, management services, and capital-premises

Profits and number of participants.

Cobb-Douglas stochastic cost frontier model.

The efficiency score of each pension manager was derived and this could be used to predict their future capacity to earn fair returns for the participants.


Keshari & Paul (1994) . Relative efficiency of Foreign and domestic banks.

Labour, Capital and material inputs Labour input follows Subrahmanyam & Swani (1992) .

Sum of total amount of deposits and advances of a bank.

Stochastic frontier production function.

Foreign bank group was 1% less efficient than the domestic. The banks were found to record the same level of efficiencies.


Lozano-Vivas, Kumbhakar, Fethi, & Shaban (2011) . Consolidation in European banking industry: How effective is it?

Deposits were used as both inputs and outputs at the same time. The inputs are borrowed funds, labour, and physical capital.

The output variables include loans, deposits, and other earning assets.

Stochastic Cost frontier approach.

The study found that banks that were involved in cross-border mergers are more cost efficient when compared to banks that were involved in domestic mergers.


Karim (2001) . Comparative bank efficiency across selected ASEAN countries.

Expenses on wages and salaries, land, buildings, & equipment and interest per dollar of deposits

Dollar amounts of commercial, industrial and other loans; time deposits, demand deposits, and securities & investments.

Stochastic cost function model.

The study found significant differences in efficiency across ASEAN banks with the Thai bank being the least efficient. Larger banks seem to be less technical efficient compared to smaller banks.


Gouhua & Apostolos (2009) . Efficiency and productivity of the US banking industry, 1998-2005: Evidence from frontier cost function satisfying global regulatory conditions.

All core deposits and purchased funds and financial equity capital. Also, wage rate, the interest rate for borrowed funds, and price of physical capital.

Consumer loan, non-consumer loans such as industrial & commercial loans & real estate loans; and securities.

Frontier stochastic cost function.

Banks with assets greater than $1 billion in 1998 are less efficient than the other subgroups. Also, the largest four banks subgroups (with assets greater than $400 million) experienced significant productivity gains when compared to the smallest eight banks subgroups.


Greene & Segal (2004) . Profitability and efficiency in the U.S life insurance policy.

Labour, capital and materials.

Amount of life insurance, total annuity, total premiums, and investment.

Stochastic cost function model.

The study found significant cost inefficiency in the life insurance industry when compared to earnings and that there is negative relationship between inefficiency and profitability.