Efficiency and productivity in banks developed through Data Envelopment Analysis: a cross country-perspective
AbstractThe paper analyzes the efficiency and productivity of the most important banking system from 2006-08 and tries to address the long-term challenges posed by the global financial crisis. A non-parametric frontier analysis (DEA) is applied to estimate the relative efficiency of banks segments in six industrial countries. A Malmquist decomposition is then carried out in order to separate efficiency change from technical change. Based on a large sample of banks, our findings reveal that banking efficiency has decreased since 2007. If in 2006 eight of the 13 banking sectors included in the study were situated on the efficiency frontier, in 2008 only three of them succeeded in reaching this frontier. In what concerns the productivity we observe an obvious tendency of aggravation. Therefore this index knew a decrease of 9.1% in 2007 in comparison with 2006 and it also continued to decrease in 2008.
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Bibliographic InfoArticle provided by University of Craiova, Faculty of Economics and Business Administration in its journal Finance - Challenges of the Future.
Volume (Year): 1 (2009)
Issue (Month): 10 (December)
bank performance; cost efficiency; productivity; data envelopment analysis; Malmquist Index;
Find related papers by JEL classification:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- G01 - Financial Economics - - General - - - Financial Crises
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
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- Elena Loukoianova, 2008. "Analysis of the Efficiency and Profitability of the Japanese Banking System," IMF Working Papers 08/63, International Monetary Fund.
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