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Technical Efficiency and Total Factor Productivity in the Kazakh Banking Industry

Author

Listed:
  • Adnan Kasman

    (Department of Economics, Faculty of Business, Dokuz Eylul University, Izmir, Turkey)

  • Kamila Mekenbayeva

    (National Bank of Kazakhstan, Department of Research and Strategic Analysis, Division of Monitoring of Enterprises Position, Almaty, Kazakhstan)

Abstract

This paper investigates the technical efficiency and productivity of Kazakh commercial banks over the period 2000–2013. Non-parametric approaches, namely the Data Envelopment Analysis and the Malmquist index are employed to calculate technical efficiency and productivity. In addition, a second-stage regression is also estimated to identify the determinants of efficiency. The results indicate that banks in Kazakhstan operate below their optimum levels, with larger banks being more efficient than smaller ones. The results also indicate the presence of economies of scale for banks of all sizes. The efficiency of banks is found to be significantly and positively related to profitability, capitalisation, bank size, and liquidity. The results further indicate that Kazakh banks seem to have experienced a significant productivity growth over the sample period.

Suggested Citation

  • Adnan Kasman & Kamila Mekenbayeva, 2016. "Technical Efficiency and Total Factor Productivity in the Kazakh Banking Industry," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 66(4), pages 685-709, December.
    • Handle: RePEc:aka:aoecon:v:66:y:2016:i:4:p:685-709
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    References listed on IDEAS

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    Cited by:

    1. M.V. Leonov, 2021. "Review of Modern Approaches for Assessing the Effectiveness of Banking," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 20(2), pages 294-326.

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    More about this item

    Keywords

    Kazakh banks; technical efficiency; Malmquist total factor productivity index; DEA;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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