To
investigate the risk-taking impacts on bank efficiency in emerging Asian
countries, we used a stochastic frontier approach technique. Empirical findings
indicate more bank inefficiency in China than other countries, implying
that management must not understand
how to ensure their resources are being effectively utilized. The results
show that credit risk plays more of an important role in banks’ efficiency than
operating risk and market risk, and this is consistent with the general idea
that banks have a better profitability when they are more stable.
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