This paper presents a comparative analysis of the performance of 17 Libyan banks during the period 2004 - 2010. According to the relevant literature, there are few studies that measure both technical efficiency and Malmquist productivity index approach using non – parametric approach (DEA) for the banking sector in Libya. In this study, we used the DEA technique to calculate technical, pure technical, and scale efficiency of sampled banks by using DEAP software. The findings showed that higher mean technical efficiency of specialized banks comparing with commercial and private banks. This paper concludes with some policy implications of the results. The results for total factor productivity (TFP) showed 11 of 17 Libyan banks decline because TFP levels of banks drawn by negative technical efficiency change (less than 1) or by negative technological change, or both of them are negative.
This study contributes in the existing literature and to provide practical contribution to practitioners who implement financial initiatives in Libya such as financial managers, policy makers, strategists and financial specialists and analysts. Also, this study is one of very few studies which have investigated in Arab Countries particularly in Libya.
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