This dissertation focuses on the heterogeneous production technologies in banking and finance within the context of efficiency-analyses. The first essay studies the cost efficiency of Turkish banking industry. Studies of bank efficiency tend to draw conclusions from pooled estimates, assuming that all banks in a sample use the same technology, or estimates based on a priori classifications of the banks. It is well known that efficiency rankings may be corrupted if banks that use different technologies are pooled together in estimating the technological frontier with respect to which inefficiency is estimated. We model unobserved heterogeneity in banking technologies as a mixture model, and investigate the efficiencies of 53 Turkish banks using likelihood-based stochastic frontier analysis for the period 1990--2000. Our likelihood-based analysis finds no evidence of heterogeneity along the state vs. private and Islamic vs. conventional dimensions. The estimated classifications and mixture components have intuitive ex post institutional explanations. The second essay investigates the labor efficiency of Turkish banks for 1990--2000 by using a flexible translog functional form where the demand for labor is a function of loans, deposits, number of branches, total fixed assets and a time variable. The model allows for the possibility that at any point banks' observed employment may not be optimal. We expand the labor-use model by utilizing the EC (Estimation-Classification) estimator to obtain data-driven identification of bank-technology-classes in our sample. The third essay uses a set of semiparametric efficient (SPE) estimators for a panel data of 32 developing countries to investigate the effect of sources of external financing on production efficiency. The idea of production frontiers for firms in a given industry is applied in a macroeconomic context in which countries are producers of output (GDP) given inputs (capital and labor) and some external factors (i.e. debt, equity and foreign direct investment (FDI) stocks). Using two recent datasets, we are able to investigate the individual impact of foreign liabilities, namely debt, equity and FDI, on production efficiency. The estimates indicate that FDI plays a more prominent role of promoting production efficiency than debt or equity financing for developing countries.