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Financial liberalization and banking efficiency: evidence from Turkey

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  • Cevdet Denizer
  • Mustafa Dinc

    ()

  • Murat Tarimcilar

Abstract

This paper examines the banking efficiency in a pre- and post-liberalization environment by drawing on the Turkish experience by using DEA. The paper also investigates the scale effect on efficiency. Our findings suggest that liberalization programs were followed by an observable decline in efficiency. Another finding of the study is that the Turkish banking system had a serious scale problem during the study period. The second part of our analysis relied on econometric methods and found that one major reason for such system-wide efficiency decline has been the growing macroeconomic instability of the Turkish economy in general and financial sector in particular. Copyright Springer Science+Business Media, LLC 2007

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Bibliographic Info

Article provided by Springer in its journal Journal of Productivity Analysis.

Volume (Year): 27 (2007)
Issue (Month): 3 (June)
Pages: 177-195

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Handle: RePEc:kap:jproda:v:27:y:2007:i:3:p:177-195

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Web page: http://www.springerlink.com/link.asp?id=100296

Related research

Keywords: Banking; Efficiency; Liberalization; Data envelopment analysis; C14; C61; G21; G28;

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References

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Citations

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Cited by:
  1. George von Furstenberg, 2007. "Assessing the Competitiveness of International Financial Services in Particular Locations: A Survey of Methods and Perspectives," Caepr Working Papers, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington 2007-024, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington.
  2. Patricia Tecles & Benjamin M. Tabak, 2010. "Determinants of Bank Efficiency: the case of Brazil," Working Papers Series, Central Bank of Brazil, Research Department 210, Central Bank of Brazil, Research Department.
  3. George Assaf, A. & Matousek, Roman & Tsionas, Efthymios G., 2013. "Turkish bank efficiency: Bayesian estimation with undesirable outputs," Journal of Banking & Finance, Elsevier, vol. 37(2), pages 506-517.
  4. Hsiao, Hsing-Chin & Chang, Hsihui & Cianci, Anna M. & Huang, Li-Hua, 2010. "First Financial Restructuring and operating efficiency: Evidence from Taiwanese commercial banks," Journal of Banking & Finance, Elsevier, vol. 34(7), pages 1461-1471, July.
  5. Yang, Chyan & Liu, Hsian-Ming, 2012. "Managerial efficiency in Taiwan bank branches: A network DEA," Economic Modelling, Elsevier, vol. 29(2), pages 450-461.
  6. Sunil Kumar & Rachita Gulati, 2009. "Did efficiency of Indian public sector banks converge with banking reforms?," International Review of Economics, Springer, Springer, vol. 56(1), pages 47-84, March.
  7. Darold Barnum & John Gleason, 2011. "Measuring efficiency under fixed proportion technologies," Journal of Productivity Analysis, Springer, Springer, vol. 35(3), pages 243-262, June.

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