Applying Input Distance Function to Measure Pre-Recession Efficiencies of Surviving and Critically Insolvent Banks of the Late 2000s Financial Crisis

Stochastic frontier analysis is used to evaluate the technical and allocative efficiencies for banks classified based on industry specialization (agricultural and non-agricultural banks) and solvency condition (non-critical and critical banks). The analytical framework allows for comparisons of input utilization decisions that could translate to cost savings and enhanced operating efficiencies.