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Testing the Efficiency of Turkish Banks

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  • Ali Argun Karacabey

    (Faculty of Political Sciences, Ankara University)

Abstract

This paper reports results from the application of Data Envelopment Analysis (DEA) on Turkish commercial banks. The aim of this paper is twofold. First, to measure the 'intermediation' efficiency and profitability of Turkish banks. Second, to examine the relationship between efficiency and profitability. The results of the research generally indicate that theTurkish banking sector operates profitably despite its inefficiency from an intermediation perspective. The results also show that in an environment with low interest rates, low public borrowing requirements and severe competition, the number of bank failures is expected to increase.

Suggested Citation

  • Ali Argun Karacabey, 2001. "Testing the Efficiency of Turkish Banks," Working Papers 0121, Economic Research Forum, revised 07 2001.
    • Handle: RePEc:erg:wpaper:0121
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    References listed on IDEAS

    as
    1. Berger, Allen N. & Humphrey, David B., 1997. "Efficiency of financial institutions: International survey and directions for future research," European Journal of Operational Research, Elsevier, vol. 98(2), pages 175-212, April.
    2. Fried, Harold O. & Lovell, C. A. Knox & Schmidt, Shelton S. (ed.), 1993. "The Measurement of Productive Efficiency: Techniques and Applications," OUP Catalogue, Oxford University Press, number 9780195072181, Decembrie.
    3. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
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