Efficiency Measures of the Greek Banking Sector: A Non-Parametric Approach for the Period 1997-1999
AbstractThis study explores the efficiency of the Greek Banking sector with the use of a number of suggested financial efficiency ratios for the time period 1997-99. A non-parametric analytic technique (Data Envelopment Analysis) is employed for measuring efficiency. The suggested model in our analysis offers an empirical reference set for comparing the inefficient banks with the efficient ones. For each year we estimate the relative efficiency and determine the feasible targets for improvement of each bank. The analysis shows that, the total improvement in efficiency in the Banking sector is mainly attributed to the increase in the efficiency ratio resulting from the significant increase in revenues mainly from their activation in the Greek Stock Exchange Market. We find that the higher the size of total assets the higher the efficiency is. We also show that the increase in efficiency is accompanied with a reduction in the number of small banks due to mergers and acquisitions.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 2858.
Date of creation: 06 May 2001
Date of revision:
Banking; Financial ratios; Data Envelopment Analysis;
Find related papers by JEL classification:
- C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
- M40 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - General
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
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- Ferrier, Gary D. & Lovell, C. A. Knox, 1990. "Measuring cost efficiency in banking : Econometric and linear programming evidence," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 229-245.
- Oral, Muhittin & Yolalan, Reha, 1990. "An empirical study on measuring operating efficiency and profitability of bank branches," European Journal of Operational Research, Elsevier, vol. 46(3), pages 282-294, June.
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- Berg, Sigbjorn Atle & Forsund, Finn R. & Hjalmarsson, Lennart & Suominen, Matti, 1993. "Banking efficiency in the Nordic countries," Journal of Banking & Finance, Elsevier, vol. 17(2-3), pages 371-388, April.
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