Unravelling the Determinants of Banking Efficiency in Argentina: A Two-Stage Analysis of the Argentine Banking Sector

Facundo Eduardo Costa de Arguibel; Juan Antonio Dip; Gerardo Orlando Stvass

doi:10.4067/S0718-88702026000100111

Authors

Facundo Eduardo Costa de Arguibel Facultad de Ciencias Económicas, Universidad Nacional de Misiones, Misiones, Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas (CONICET), Argentina
Juan Antonio Dip Facultad de Ciencias Económicas, Universidad Nacional de Misiones, Misiones, Argentina
Gerardo Orlando Stvass Facultad de Ciencias Económicas, Universidad Nacional de Misiones, Misiones, Argentina

DOI:

https://doi.org/10.4067/S0718-88702026000100111

Keywords:

Banking diversification, Non-traditional activities, Efficiency, Double Bootstrap Regression DEA, Argentina

Abstract

This paper studies the interrelationship between non-traditional activities, ownership structure, and performance of banks in Argentina from 2012 to 2019. Using the Simar and Wilson (2007) approach, we estimate banks’ technical efficiency through Bootstrapped Data Envelopment Analysis (DEA), including and excluding non-traditional activities. A truncated regression with Bootstrap is employed to analyse the impact of non-traditional activities and asset origin on efficiency. Our robust results demonstrate a positive relationship between non-traditional activities and bank efficiency, with foreign banks outperforming local peers in leveraging diversification. Additionally, public banks are found to be less efficient than private ones. Our results highlight the critical role of non-traditional activities in the banking output mix, as their exclusion could lead to an underestimation of efficiency. Consequently, it is essential to incorporate these activities in efficiency assessments. The results remain robust across different variable selections and specifications

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