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A comparison of DEA and SFA using micro- and macro-level perspectives: Efficiency of Chinese local banks

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  • Silva, Thiago Christiano
  • Tabak, Benjamin Miranda
  • Cajueiro, Daniel Oliveira
  • Dias, Marina Villas Boas

Abstract

This study investigates to which extent results produced by a single frontier model are reliable, based on the application of data envelopment analysis and stochastic frontier approach to a sample of Chinese local banks. Our findings show they produce a consistent trend on global efficiency scores over the years. However, rank correlations indicate they diverge with respect to individual performance diagnoses. Therefore, these models provide steady information on the efficiency of the banking system as a whole, but they become divergent at the individual level.

Suggested Citation

  • Silva, Thiago Christiano & Tabak, Benjamin Miranda & Cajueiro, Daniel Oliveira & Dias, Marina Villas Boas, 2017. "A comparison of DEA and SFA using micro- and macro-level perspectives: Efficiency of Chinese local banks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 469(C), pages 216-223.
    • Handle: RePEc:eee:phsmap:v:469:y:2017:i:c:p:216-223
    DOI: 10.1016/j.physa.2016.11.041
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