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Efficiency of the Bangladesh Banking Sector: Evidence from the Profit Function

Author

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  • Fadzlan Sufian

    (Fadzlan Sufian, Taylor’s University, Taylor’s Business School, Malaysia. E-mails: fadzlan.sufian@taylors.edu.my; fadzlan.sufian@gmail.com)

  • Fakarudin Kamarudin

    (Fakarudin Kamarudin, Faculty of Economics and Management, Universiti Putra Malaysia, Malaysia. E-mails: fakarudinkamarudin@gmail.com; fakarudin@upm.edu.my)

Abstract

The study investigates the level of profit efficiency in the Bangladesh banking sector over the years 2004–2011. We employ the Data Envelopment Analysis (DEA) method to assess the level of profit efficiency of Bangladesh commercial banks. The empirical findings indicate that the Bangladesh banking sector has exhibited the highest and lowest level of profit efficiency during the years 2004 and 2009, respectively. We find that there are only eight banks which have been profit-efficient, while another four banks are classified as profit-inefficient. The findings from this study are expected to contribute significantly toward decision-making for regulators, policymakers, bank managers, investors, and also to the existing knowledge on operating performance of the Bangladesh banking sector.

Suggested Citation

  • Fadzlan Sufian & Fakarudin Kamarudin, 2013. "Efficiency of the Bangladesh Banking Sector: Evidence from the Profit Function," Jindal Journal of Business Research, , vol. 2(1), pages 43-57, June.
    • Handle: RePEc:sae:jjlobr:v:2:y:2013:i:1:p:43-57
    DOI: 10.1177/2278682114532644
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