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A modified SBM-NDEA approach for the efficiency measurement in bank branches

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  • Fatemeh Boloori

    (Azarbaijan Shahid Madani University)

  • Jafar Pourmahmoud

    (Azarbaijan Shahid Madani University)

Abstract

Efficiency measurement has been an essential topic in banking research. Many studies have used the data envelopment analysis approach as an effective tool for the efficiency measurement of bank branches. Recently, the Network (NDEA) method has been introduced, which involves internal processes and intermediate factors in the efficiency measurement. A few studies have used this method for the efficiency measurement of bank branches; they have considered two processes in branches and used two-stage models. In this study, we will use a more general approach and a more complete network structure consisting of three processes, including the deposit attraction process, deposit allocation process and banking services provision process. Since we want to obtain efficient targets, an envelopment form of the NDEA model had to be used. Therefore, a slack-based NDEA model, as introduced by Tone and Tsutsui (SBM-NDEA), was nominated to support its mathematical model. But according to the new categorization of the efficiency measurement factors introduced in this paper, and also regarding some previous reviews on SBM-NDEA model, the model will be modified to include the desired properties. Finally, by applying the modified model, branches efficiency scores and also efficient targets will be obtained.

Suggested Citation

  • Fatemeh Boloori & Jafar Pourmahmoud, 2016. "A modified SBM-NDEA approach for the efficiency measurement in bank branches," Operational Research, Springer, vol. 16(2), pages 301-326, July.
    • Handle: RePEc:spr:operea:v:16:y:2016:i:2:d:10.1007_s12351-015-0201-1
    DOI: 10.1007/s12351-015-0201-1
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    References listed on IDEAS

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    6. Fatemeh Boloori & Rashed Khanjani-Shiraz & Hirofumi Fukuyama, 2021. "Relative partial efficiency: network and black box SBM DEA interpretations in multiplier form," Operational Research, Springer, vol. 21(4), pages 2689-2718, December.

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