IDEAS home Printed from https://ideas.repec.org/a/gam/jmathe/v7y2019i1p73-d196976.html
   My bibliography  Save this article

Assessing Bank Performance Using Dynamic SBM Model

Author

Listed:
  • Chia-Nan Wang

    (Department of Industrial Engineering and Management, National Kaohsiung University of Science and Technology, Kaohsiung 80778, Taiwan
    Department of Industrial Engineering and Management, Fortune Institute of Technology, Kaohsiung 83160, Taiwan)

  • Quoc-Chien Luu

    (Department of Industrial Engineering and Management, National Kaohsiung University of Science and Technology, Kaohsiung 80778, Taiwan)

  • Thi-Kim-Lien Nguyen

    (Department of Industrial Engineering and Management, National Kaohsiung University of Science and Technology, Kaohsiung 80778, Taiwan)

  • Jen-Der Day

    (Department of Industrial Engineering and Management, National Kaohsiung University of Science and Technology, Kaohsiung 80778, Taiwan)

Abstract

Global economic growth has led banks to expand their operations all over the world. The purpose of this research was to understand the efficiency of 18 large bank from all over the world during the period from 2013 to 2017. The performance was estimated by a dynamic slacks-based measure (SBM) model in data envelopment analysis (DEA). This model could be solved using inputs, outputs, and links. The banks variables were considered as follows: Assets, capitalization, and liabilities as inputs; revenue as output; and net interest income as a good link. The final empirical results exhibit the efficiency for each term, and the overall score. The data analysis recommends a feasible solution to refine inefficient terms based on the projections (slacks). This study visually observed the proficiency of the banking industry to equip enterprises with the best choice for their finances.

Suggested Citation

  • Chia-Nan Wang & Quoc-Chien Luu & Thi-Kim-Lien Nguyen & Jen-Der Day, 2019. "Assessing Bank Performance Using Dynamic SBM Model," Mathematics, MDPI, vol. 7(1), pages 1-13, January.
    • Handle: RePEc:gam:jmathe:v:7:y:2019:i:1:p:73-:d:196976
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7390/7/1/73/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7390/7/1/73/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Dang, Chongyu & (Frank) Li, Zhichuan & Yang, Chen, 2018. "Measuring firm size in empirical corporate finance," Journal of Banking & Finance, Elsevier, vol. 86(C), pages 159-176.
    2. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    3. Cooper, W. W. & Seiford, Lawrence M. & Thanassoulis, Emmanuel & Zanakis, Stelios H., 2004. "DEA and its uses in different countries," European Journal of Operational Research, Elsevier, vol. 154(2), pages 337-344, April.
    4. Lee, Chi-Chuan & Huang, Tai-Hsin, 2017. "Cost efficiency and technological gap in Western European banks: A stochastic metafrontier analysis," International Review of Economics & Finance, Elsevier, vol. 48(C), pages 161-178.
    5. King, Robert G. & Levine, Ross, 1993. "Finance, entrepreneurship and growth: Theory and evidence," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 513-542, December.
    6. Xiangyu Teng & Liang Chun Lu & Yung-ho Chiu, 2018. "Considering Emission Treatment for Energy-Efficiency Improvement and Air Pollution Reduction in China’s Industrial Sector," Sustainability, MDPI, vol. 10(11), pages 1-18, November.
    7. Guo, Xiaoying & Lu, Ching-Cheng & Lee, Jen-Hui & Chiu, Yung-Ho, 2017. "Applying the dynamic DEA model to evaluate the energy efficiency of OECD countries and China," Energy, Elsevier, vol. 134(C), pages 392-399.
    8. Ross Levine, 1997. "Financial Development and Economic Growth: Views and Agenda," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 688-726, June.
    9. Jiro Nemoto & Mika Goto, 2003. "Measurement of Dynamic Efficiency in Production: An Application of Data Envelopment Analysis to Japanese Electric Utilities," Journal of Productivity Analysis, Springer, vol. 19(2), pages 191-210, April.
    10. Cui, Qiang & Li, Ye & Yu, Chen-lu & Wei, Yi-Ming, 2016. "Evaluating energy efficiency for airlines: An application of Virtual Frontier Dynamic Slacks Based Measure," Energy, Elsevier, vol. 113(C), pages 1231-1240.
    11. Tone, Kaoru & Tsutsui, Miki, 2010. "Dynamic DEA: A slacks-based measure approach," Omega, Elsevier, vol. 38(3-4), pages 145-156, June.
    12. A. Charnes & W. W. Cooper & E. Rhodes, 1981. "Evaluating Program and Managerial Efficiency: An Application of Data Envelopment Analysis to Program Follow Through," Management Science, INFORMS, vol. 27(6), pages 668-697, June.
    13. Tone, Kaoru, 2002. "A slacks-based measure of super-efficiency in data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 143(1), pages 32-41, November.
    14. Tone, Kaoru, 2001. "A slacks-based measure of efficiency in data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 130(3), pages 498-509, May.
    15. Dell'Ariccia, Giovanni & Marquez, Robert, 2004. "Information and bank credit allocation," Journal of Financial Economics, Elsevier, vol. 72(1), pages 185-214, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jiao Feng & Nannan Wang & Guoshuai Sun, 2022. "Measurement of Innovation-Driven Development Performance of Large-Scale Environmental Protection Enterprises Investing in Public–Private Partnership Projects Based on the Hybrid Method," Sustainability, MDPI, vol. 14(9), pages 1-21, April.
    2. Monica Aureliana Petcu & Liliana Ionescu-Feleaga & Bogdan-Ștefan Ionescu & Dumitru-Florin Moise, 2023. "A Decade for the Mathematics : Bibliometric Analysis of Mathematical Modeling in Economics, Ecology, and Environment," Mathematics, MDPI, vol. 11(2), pages 1-30, January.
    3. Larissa M. Batrancea, 2021. "An Econometric Approach on Performance, Assets, and Liabilities in a Sample of Banks from Europe, Israel, United States of America, and Canada," Mathematics, MDPI, vol. 9(24), pages 1-22, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mai, Nhat Chi, 2015. "Efficiency of the banking system in Vietnam under financial liberalization," OSF Preprints qsf6d, Center for Open Science.
    2. Fang-Rong Ren & Ze Tian & Yu-Ting Shen & Yung-Ho Chiu & Tai-Yu Lin, 2019. "Energy, CO 2 , and AQI Efficiency and Improvement of the Yangtze River Economic Belt," Energies, MDPI, vol. 12(4), pages 1-17, February.
    3. Xiangyu Teng & Fan‐peng Liu & Yung‐ho Chiu, 2020. "The impact of coal and non‐coal consumption on China's energy performance improvement," Natural Resources Forum, Blackwell Publishing, vol. 44(4), pages 334-352, November.
    4. Necmi Kemal Avkiran, 2017. "An illustration of multiple-stakeholder perspective using a survey across Australia, China and Japan," Annals of Operations Research, Springer, vol. 248(1), pages 93-121, January.
    5. Lampe, Hannes W. & Hilgers, Dennis, 2015. "Trajectories of efficiency measurement: A bibliometric analysis of DEA and SFA," European Journal of Operational Research, Elsevier, vol. 240(1), pages 1-21.
    6. Ebenezer Fiifi Emire Atta Mills & Mavis Agyapomah Baafi & Fangbiao Liu & Kailin Zeng, 2021. "Dynamic operating efficiency and its determining factors of listed real‐estate companies in China: A hierarchical slack‐based DEA‐OLS approach," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(3), pages 3352-3376, July.
    7. Chen, Yufeng & Ni, Liangfu & Liu, Kelong, 2021. "Does China's new energy vehicle industry innovate efficiently? A three-stage dynamic network slacks-based measure approach," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    8. Zhen Shi & Fengping Wu & Huinan Huang & Xinrui Sun & Lina Zhang, 2019. "Comparing Economics, Environmental Pollution and Health Efficiency in China," IJERPH, MDPI, vol. 16(23), pages 1-30, December.
    9. Aparicio, Juan & Kapelko, Magdalena, 2019. "Accounting for slacks to measure dynamic inefficiency in data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 278(2), pages 463-471.
    10. Plácido Moreno & Sebastián Lozano, 2014. "A network DEA assessment of team efficiency in the NBA," Annals of Operations Research, Springer, vol. 214(1), pages 99-124, March.
    11. Hosseini, Keyvan & Stefaniec, Agnieszka, 2019. "Efficiency assessment of Iran's petroleum refining industry in the presence of unprofitable output: A dynamic two-stage slacks-based measure," Energy, Elsevier, vol. 189(C).
    12. Zhen Shi & Huinan Huang & Yingju Wu & Yung-Ho Chiu & Shijiong Qin, 2020. "Climate Change Impacts on Agricultural Production and Crop Disaster Area in China," IJERPH, MDPI, vol. 17(13), pages 1-23, July.
    13. Teng, Xiangyu & Liu, Fan-peng & Chiu, Yung-ho, 2021. "The change in energy and carbon emissions efficiency after afforestation in China by applying a modified dynamic SBM model," Energy, Elsevier, vol. 216(C).
    14. Wang, Chia-Nan & Nguyen, Xuan-Tho & Le, Thi-Dao & Hsueh, Ming-Hsien, 2018. "A partner selection approach for strategic alliance in the global aerospace and defense industry," Journal of Air Transport Management, Elsevier, vol. 69(C), pages 190-204.
    15. Fang Wu & Mingyao Gu & Chenming Zhu & Yingna Qu, 2023. "Temporal-Spatial Evolution and Trend Prediction of the Supply Efficiency of Primary Medical Health Service—An Empirical Study Based on Central and Western Regions of China," IJERPH, MDPI, vol. 20(3), pages 1-23, January.
    16. Liang-Han Ma & Jin-Chi Hsieh & Yung-Ho Chiu, 2020. "Comparing regional differences in global energy performance," Energy & Environment, , vol. 31(6), pages 943-960, September.
    17. Liang Chun Lu & Yung-ho Chiu & Shih-Yung Chiu & Tzu-Han Chang, 2022. "Do Forests help environmental development of Cities in China?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(5), pages 6602-6629, May.
    18. Wanke, Peter & Tsionas, Mike G. & Chen, Zhongfei & Moreira Antunes, Jorge Junio, 2020. "Dynamic network DEA and SFA models for accounting and financial indicators with an analysis of super-efficiency in stochastic frontiers: An efficiency comparison in OECD banking," International Review of Economics & Finance, Elsevier, vol. 69(C), pages 456-468.
    19. Xu Zhang & Huaping Sun & Taohong Wang, 2022. "Impact of Financial Inclusion on the Efficiency of Carbon Emissions: Evidence from 30 Provinces in China," Energies, MDPI, vol. 15(19), pages 1-15, October.
    20. Nelson Amowine & Zhiqiang Ma & Mingxing Li & Zhixiang Zhou & Benjamin Azembila Asunka & James Amowine, 2019. "Energy Efficiency Improvement Assessment in Africa: An Integrated Dynamic DEA Approach," Energies, MDPI, vol. 12(20), pages 1-17, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jmathe:v:7:y:2019:i:1:p:73-:d:196976. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.