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Levels of efficiency in UK retail banks: a DEA window analysis

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  • Robert Webb

Abstract

This article utilizes DEA window analysis in order to investigate the relative efficiency levels of large UK retail banks during the period of transition 1982-1995. It finds that for the entire sample, the mean inefficiency levels are low in comparison to past studies, that the overall long run average efficiency trend is falling and that all banks in the study show reducing levels of efficiency over the entire time period. It then goes on to disaggregate efficiency into scale and pure technical efficiency and finds that: (1) scale inefficiencies dominate pure technical inefficiencies; (2) less big banks are more likely to report technical inefficiency and (3) during the 1990s banks with asset levels over £105bn suffer decreasing returns to scale

Suggested Citation

  • Robert Webb, 2003. "Levels of efficiency in UK retail banks: a DEA window analysis," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 10(3), pages 305-322.
  • Handle: RePEc:taf:ijecbs:v:10:y:2003:i:3:p:305-322
    DOI: 10.1080/1357151032000126256
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    References listed on IDEAS

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    Cited by:

    1. Fadzlan Sufian & Muhamed Zulkhibri Abdul Majid, 2009. "Bank efficiency and share prices in China: empirical evidence from a three-stage banking model," International Journal of Computational Economics and Econometrics, Inderscience Enterprises Ltd, vol. 1(1), pages 23-47.
    2. Halkos, George E. & Tzeremes, Nickolaos G., 2011. "Oil consumption and economic efficiency: A comparative analysis of advanced, developing and emerging economies," Ecological Economics, Elsevier, vol. 70(7), pages 1354-1362, May.
    3. Halkos, George Emm. & Tzeremes, Nickolaos G., 2009. "Exploring the existence of Kuznets curve in countries' environmental efficiency using DEA window analysis," Ecological Economics, Elsevier, vol. 68(7), pages 2168-2176, May.
    4. Arazmuradov, Annageldy, 2011. "Energy consumption and carbon dioxide environmental efficiency for former Soviet Union economies. evidence from DEA window analysis," MPRA Paper 36903, University Library of Munich, Germany, revised 24 Feb 2012.
    5. Wang, Wei-Kang & Lu, Wen-Min & Kweh, Qian Long & Lai, Hsiao-Wen, 2014. "Does corporate social responsibility influence the corporate performance of the U.S. telecommunications industry?," Telecommunications Policy, Elsevier, vol. 38(7), pages 580-591.
    6. Trofimov, Ivan D. & Md. Aris, Nazaria & Ying Ying, Jovena Kho, 2018. "Determinants of Commercial Banks' Profitability in Malaysia," MPRA Paper 85598, University Library of Munich, Germany.
    7. Rodrigo Gómez Monge, 2012. "El sector bancario en México, los depósitos a plazo y las cuentas de ahorro: un análisis de eficiencia durante el periodo de internacionalización a través de la envolvente de datos (dea)," REVISTA CIENCIAS ESTRATÉGICAS, UNIVERSIDAD PONTIFICIA BOLIVARIANA, June.
    8. Georgios D. Papagiannis, 2014. "Measurement of Efficiency in Greek Banking Industries in The Light of the Financial Crisis," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 19-38.
    9. Amir Moradi-Motlagh & Ali Salman Saleh, 2014. "Re-Examining the Technical Efficiency of Australian Banks: A Bootstrap DEA Approach," Australian Economic Papers, Wiley Blackwell, vol. 53(1-2), pages 112-128, June.
    10. Zhang, Xing-Ping & Cheng, Xiao-Mei & Yuan, Jia-Hai & Gao, Xiao-Jun, 2011. "Total-factor energy efficiency in developing countries," Energy Policy, Elsevier, vol. 39(2), pages 644-650, February.
    11. Du, Huibin & Matisoff, Daniel C. & Wang, Yangyang & Liu, Xi, 2016. "Understanding drivers of energy efficiency changes in China," Applied Energy, Elsevier, vol. 184(C), pages 1196-1206.
    12. Halkos, George E. & Tzeremes, Nickolaos G., 2009. "Economic efficiency and growth in the EU enlargement," Journal of Policy Modeling, Elsevier, vol. 31(6), pages 847-862, November.
    13. Wahidudin, Ahmad Nazri, 2010. "Technical Efficiency of Commercial Banks in Malaysia: An Application of Window Data Envelopment Analysis," MPRA Paper 45136, University Library of Munich, Germany.
    14. Robert Webb & Cormac Bryce & Duncan Watson, 2010. "The effect of building society demutualisation on levels of efficiency at large UK commercial banks," Journal of Financial Regulation and Compliance, Emerald Group Publishing, vol. 18(4), pages 333-355, November.

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    Keywords

    UK Banking; Efficiency; DEA; Window Analysis;

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