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Comparative analysis of banking production frameworks in eastern european financial markets

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  • Kenjegalieva, Karligash
  • Simper, Richard
  • Weyman-Jones, Tom
  • Zelenyuk, Valentin

Abstract

This paper performs comparative analysis of the non-radial Russell output technical efficiency measures of 13 Eastern European banking systems assuming a banking production with risk as an undesirable output and where output components can be negative. This is analysed utilizing three modelling specifications; the intermediation, production and profit methodologies. Along with distribution and inter-distribution mobility analysis of the efficiency scores across alternative methodologies, we also estimate and statistically compare the distributions of estimated efficiency scores using the bootstrap-based Simar-Zelenyuk-adapted-Li test. The results suggest that although the efficiency levels differ across the approaches, change in positions of the banks relative to the mean is not substantial across the three methodologies.

Suggested Citation

  • Kenjegalieva, Karligash & Simper, Richard & Weyman-Jones, Tom & Zelenyuk, Valentin, 2009. "Comparative analysis of banking production frameworks in eastern european financial markets," European Journal of Operational Research, Elsevier, vol. 198(1), pages 326-340, October.
  • Handle: RePEc:eee:ejores:v:198:y:2009:i:1:p:326-340
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Tsionas, Efthymios G. & Assaf, A. George & Matousek, Roman, 2015. "Dynamic technical and allocative efficiencies in European banking," Journal of Banking & Finance, Elsevier, vol. 52(C), pages 130-139.
    2. Muliaman D. Hadad & Maximilian J. B. Hall & Wimboh Santoso & Karligash Kenjegalieva & Richard Simper, 2010. "Productivity Changes and Risk Management in Indonesian Banking: An Application of a New Approach to Constructing Malmquist Indices," Discussion Paper Series 2010_04, Department of Economics, Loughborough University, revised Feb 2010.
    3. repec:spr:annopr:v:261:y:2018:i:1:d:10.1007_s10479-017-2628-7 is not listed on IDEAS
    4. Tsionas, Mike G., 2016. "Parameters measuring bank risk and their estimation," European Journal of Operational Research, Elsevier, vol. 250(1), pages 291-304.
    5. Tecles, Patricia Langsch & Tabak, Benjamin M., 2010. "Determinants of bank efficiency: The case of Brazil," European Journal of Operational Research, Elsevier, vol. 207(3), pages 1587-1598, December.
    6. E. Nur Ozkan Gunay, 2012. "Risk Incorporation and Efficiency in Emerging Market Banks During the Global Crisis: Evidence from Turkey, 2002-2009," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 48(S5), pages 91-102, November.
    7. Muliaman Hadad & Maximilian Hall & Karligash Kenjegalieva & Wimboh Santoso & Richard Simper, 2011. "Banking efficiency and stock market performance: an analysis of listed Indonesian banks," Review of Quantitative Finance and Accounting, Springer, vol. 37(1), pages 1-20, July.
    8. repec:eee:eneeco:v:68:y:2017:i:c:p:303-312 is not listed on IDEAS
    9. Muliaman D. Hadad & Maximilian J. B. Hall & Wimboh Santoso & Karligash Kenjegalieva & Richard Simper, 2009. "Productivity Changes in Indonesian Banking: Application of a New Approach to Estimating Malmquist Indices," Discussion Paper Series 2009_13, Department of Economics, Loughborough University, revised Sep 2009.
    10. Muliaman D. Hadad & Maximilian J. B. Hall & Wimboh Santoso & Karligash Kenjegalieva & Richard Simper, 2009. "A New Approach to Dealing With Negative Numbers in Efficiency Analysis: An Application to the Indonesian Banking Sector," Discussion Paper Series 2009_20, Department of Economics, Loughborough University, revised Dec 2009.
    11. Huang, Wei & Eling, Martin, 2013. "An efficiency comparison of the non-life insurance industry in the BRIC countries," European Journal of Operational Research, Elsevier, vol. 226(3), pages 577-591.
    12. Hall, Maximilian J.B. & Kenjegalieva, Karligash A. & Simper, Richard, 2012. "Environmental factors affecting Hong Kong banking: A post-Asian financial crisis efficiency analysis," Global Finance Journal, Elsevier, vol. 23(3), pages 184-201.
    13. repec:eee:ejores:v:264:y:2018:i:1:p:1-16 is not listed on IDEAS
    14. repec:spr:empeco:v:54:y:2018:i:1:d:10.1007_s00181-017-1232-7 is not listed on IDEAS
    15. E. Nur Ozkan Gunay, 2012. "Risk Incorporation and Efficiency in Emerging Market Banks During the Global Crisis: Evidence from Turkey, 2002-2009," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 48(S5), pages 91-102, November.
    16. Manh D. Pham & Valentin Zelenyuk, 2018. "Slack-based directional distance function in the presence of bad outputs: theory and application to Vietnamese banking," Empirical Economics, Springer, vol. 54(1), pages 153-187, February.
    17. Muliaman D. Hadad & Maximilian J. B. Hall & Wimboh Santoso & Ricky Satria & Karligash Kenjegalieva & Richard Simper, 2008. "Efficiency in Indonesian Banking: Recent Evidence," Discussion Paper Series 2008_13, Department of Economics, Loughborough University, revised Nov 2008.

    More about this item

    Keywords

    C14 G21 L1 OR in banking Efficiency Bootstrapping Density estimation;

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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