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On the Determinants of the Bank Efficiency in the Republic of Serbia: Two-Stage Dea Approach

Author

Listed:
  • Marjanović Ivana

    (University of Niš, Faculty of Economics, Republic of Serbia)

  • Stanković Jelena J.

    (University of Niš, Faculty of Economics, Republic of Serbia)

  • Tsaples Georgios

    (Department of Business Administration, University of Macedonia, Greece)

Abstract

The important role of the banking sector in the economic development of the country imposes the need for continuous measurement and monitoring of bank efficiency. Besides, identifying industry-specific and macroeconomic factors that affect the achieved efficiency is an important task in order to detect potential disruptions, as well as to provide adequate guidelines to improve the efficiency. Therefore, the main goal of this paper is to quantify the achieved efficiency and uncover its determinants. The study is conducted in two stages. In the first stage, using the DEA method, the efficiency of banks for the period from 2005 to 2022 will be assessed, while in the second stage, the factors of efficiency will be determined by applying Tobit regression. The results indicate that when it comes to industry-specific factors, greater market concentration unfavourably affects the efficiency of banks. Regarding the macroeconomic factors, the growth of gross domestic product, inflation rate and global financial crisis have a significant influence on the achieved level of bank efficiency in the Republic of Serbia. In addition to expanding the existing knowledge on quantification of efficiency and defining the determinants of efficiency on the example of banks in the Republic of Serbia, the results in this paper also hold relevance to policymakers and practitioners.

Suggested Citation

  • Marjanović Ivana & Stanković Jelena J. & Tsaples Georgios, 2023. "On the Determinants of the Bank Efficiency in the Republic of Serbia: Two-Stage Dea Approach," Economic Themes, Sciendo, vol. 61(2), pages 215-233, June.
    • Handle: RePEc:vrs:ecothe:v:61:y:2023:i:2:p:215-233:n:7
    DOI: 10.2478/ethemes-2023-0011
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    More about this item

    Keywords

    Data Envelopment Analysis; intermediation approach; Tobit regression; industry-specific factors; macroeconomic factors;
    All these keywords.

    JEL classification:

    • C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models
    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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