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Productivity change patterns in the Romanian banking system – the impact of size and ownership on total factor productivity

Author

Listed:
  • Anca MUNTEANU

    (University “Petru Maior”, Târgu Mureș)

  • Petre BREZEANU

    (The Bucharest University of Economic Studies)

  • Leonardo BADEA

    (University “Valahia”, Târgoviște)

Abstract

In this paper we analyze Romanian banking performance for the period 2006-2011 by computing a Malmquist index based on Data Envelopment Analysis. By adopting the intermediation approach in defining categories of inputs and outputs our conclusions focus on how ownership structure and size influence multi factor productivity change. Also this study aims at identifying the relatively best performing bank categories by focusing on the sources of total factor productivity (TFP) growth. The results point out the difficulty in describing a consistent pattern of efficiency changes in time for the period considered. Overall the trend of productivity growth is a descending one. Alternatively, large and small banks manage to obtain the best scores whereas most time second ranked are medium sized banks. As the efficiency scores suggest, scale efficiency and management efficiency are responsible for most of the productivity growth. In terms of the selected variables this means good financial management of liquidity (reflected by the input output ratio of loans and deposits), a well-considered ratio of interest incomes and expenses, comfortable personnel expenses corroborated with an adequate size of operations. Regarding the influence of ownership origin, the study presents evidence that foreign-owned banks outperform domestic owned banks.

Suggested Citation

  • Anca MUNTEANU & Petre BREZEANU & Leonardo BADEA, 2013. "Productivity change patterns in the Romanian banking system – the impact of size and ownership on total factor productivity," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(6(583)), pages 35-52, June.
    • Handle: RePEc:agr:journl:v:xx:y:2013:i:6(583):p:35-52
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    Citations

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    Cited by:

    1. Mustafa Canakcıoglu, 2019. "Evaluation Of Banking Performance Of The Balkan Countries With An Integrated Mcdm Approach Consist Of Entropy And Ocra Techniques," Economy & Business Journal, International Scientific Publications, Bulgaria, vol. 13(1), pages 341-366.
    2. Klejda GABESHI, 2020. "The Analysis Of Bank Performance Indicators," Contemporary Economy Journal, Constantin Brancoveanu University, vol. 5(1), pages 29-37.
    3. Mihai Nitoi & Cristi Spulbar, 2016. "The Relationship between Bank Efficiency and Risk and Productivity Patterns in the Romanian Banking System," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 39-53, March.
    4. Maria Carmen HUIAN & Marilena MIRONIUC & Oana Iuliana MIHAI, 2018. "Studying banking performance from an accounting perspective: Evidence from Europe," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(2(615), S), pages 5-26, Summer.

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