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Efficiency Analysis of UAE Banks

Author

Listed:
  • Ananth Rao

    (Dubai University College, Duabi, UAE)

Abstract

This paper estimated cost inefficiency, scale and scope measures and cost productivity growth rates of banks in United Arab Emirates during 1998 (a bad year for banks due to lower oil price) and 2000 ( a good year for banks as the oil prices were higher). The study provided evidence that: Substantial cost X-inefficiencies and scope economies existed in UAE banks; Average small banks improved their scale economies in 2000, while large banks maintained constant returns to sclae than in 1998; Cost productivity rate of average banks increased by 24% (when compared to the best-practicing banks)

Suggested Citation

  • Ananth Rao, 2003. "Efficiency Analysis of UAE Banks," Finance 0304011, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpfi:0304011
    Note: Type of Document - Windows-Word; prepared on Windows-NT; to print on HP/PostScript/Franciscan monk; pages: 40; figures: included. The refereed manuscript was presented at Financial Management Association International Conference at Copenhagen on 6th June 2002. The first draft modified version of the paper has been submitted for reviewe to International Journal of Finance and Banking
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    References listed on IDEAS

    as
    1. Allen N. Berger & Loretta J. Mester, 1999. "What Explains the Dramatic Changes in Cost and Profit Performance of the U.S. Banking Industry?," Center for Financial Institutions Working Papers 99-10, Wharton School Center for Financial Institutions, University of Pennsylvania.
    2. Bauer, Paul W., 1990. "Recent developments in the econometric estimation of frontiers," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 39-56.
    3. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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