Citations


Contact Us

For Marketing, Sales and Subscriptions Inquiries
2637 E Atlantic Blvd #43110
Pompano Beach, FL 33062
USA

Conference List

Measuring Efficiency in Banks: A Brief Survey on Non – Parametric Technique (Data Envelopment Analysis)

Khalad M. S. Alrafadi

,

Mazila Md Yusuf

,

Badrul Hisham Kamaruddin

Khalad M. S. Alrafadi 1

Mazila Md Yusuf 2
Badrul Hisham Kamaruddin 3

  1. Arshad Ayub Graduate Business School, Universiti Teknologi MARA, Malaysia Shah Alam, Selangor, Malaysia 1

  2. Arshad Ayub Graduate Business School, Universiti Teknologi MARA, Malaysia Shah Alam, Selangor, Malaysia 2

  3. Faculty of Business Management, Universiti Teknologi MARA, Malaysia Shah Alam, Selangor, Malaysia 3

Pages: 52-68

DOI: 10.18488/journal.62/2016.3.5/62.5.52.68

Share :


Abstract:

Objective: This paper provides a survey of efficiency in banks using Data Envelopment Analysis (DEA) in developed and developing countries. Methods: There are two ways were used; the first one is analyse previous reviews, and the other one is systemic search from ProQuest, Emerald, Scopus and Science Direct. The search conducted to identify efficiency in banks in developed and developing countries. Originality: This study contributes in the existing literature in measuring efficiency in banks using DEA as a non – parametric technique. Results: Studies that was survey showed that the score of allocative efficiency was more than technical and cost efficiencies. Also, Studies showed that the scores of cost efficiency were more than the scores of profit efficiency. Conclusion: This paper shows that most of these studies were conducted in developed countries context, Also many studies were in developing countries. But, very few studies were conducted in the context of banking industry in Arab countries.

Contribution/ Originality
This study contributes to fill the gap in literature for studies were conducted to measure the efficiency of banking industry. Also it contributes in the body of knowledge by understanding the status of efficiency in the banking industry using non – parametric approach.

Keywords:

Efficiency, Banks, Data envelopment analysis, Developed countries, Developing countries.

Video:

Reference:

  1. Ariff, M. and L. Can, 2008. Cost and profit efficiency of Chinese banks: A non – parametric analysis. China Economic Review, 19(2): 260 – 273.
  2. Bauer, P.W., A.N. Berger, G.D. Ferrier and D.B. Humphrey, 1998. Consistency conditions for regulatory analysis of financial institutions: A comparison of frontier efficiency methods. Journal of Economics and Business, 50(8): 85 – 114.
  3. Berger, A.N. and D.B. Humphrey, 1997. Efficiency of financial institutions: International survey and directions for future research. European Journal of Operational Research, Elsevier, 98(2): 175-212.
  4. Brack, E. and R. Jimborean, 2009. Cost efficiency of French banks: 1- 30. Available from http://mpra.ub.uni-muenchen.de/23471/ [Accessed 25 August 2012].
  5. Bryce, C.L., 1996. Alternative approaches to estimating the efficiency of health maintenance organizations. ProQuest Dissertations & Theses: The Sciences and Engineering Collection.
  6. Casu, B. and P. Molyneux, 2003. A comparative study of efficiency in European banking. Applied Economics, 35(17): 1865-1876.
  7. Charnes, A., W. Cooper, A. Lewin and L. Seiford, 1994. Data envelopment analysis- theory, methodology and applications. Massachusetts, USA: Kluwer Academic Publisher Group.
  8. Charnes, A. and W.W. Cooper, 1962. Programming with linear fractional functionals. Naval Research Logistic Quarterly, 9(3 – 4): 181 – 186.
  9. Charnes, A., W.W. Cooper and E. Rhodes, 1978. Measuring the efficiency of decision making units. European Journal of Operational Research, 6(2): 429 -444. DOI 10.1016/0377-2217 (78)90138-8.
  10. Chen, X., M. Skully and K. Brown, 2005. Banking efficiency in China: Application of DEA to pre – and post – deregulation eras: 1993 – 2000. China Economic Review, 16(3): 229 – 245.
  11. Chu, S.F. and G.H. Lim, 1998. Share performance and profit efficiency of banks in an oligopolistic market: Evidence from Singapore. Journal of Multinational Financial Management, 8(2 – 3): 155 –168.
  12. Clemhout, S., 1968. The class of homothetic isoquant production functions. Review of Economic Studies, 35(1): 91-104.
  13. Cooper, W.W., L.M. Seiford and K. Tone, 2003. Data envelopment analysis: A comprehensive text with models, applications, references, and DEA solver software. Massachusetts, USA: Kluwer Academic Publisher Group.
  14. Cooper, W.W., L.M. Seiford and K. Tone, 2007. Data envelopment analysis: A comprehensive text with models, applications, references and DEA-solver software. 2nd Edn., New York: Springer.
  15. Cullinane, K., T.F. Wang, D.W. Song and P. Ji, 2006. The technical efficiency of container ports: Comparing data envelopment analysis and stochastic frontier analysis. Transportation Research Part A: Policy and Practice, 40(4): 354 – 374.
  16. Cummins, J.D. and H. Zi, 1996. Measuring cost efficiency in the US life insurance industry: Econometric and mathematical programming approaches. Working paper. Available from http://fic.wharton.upenn.edu/fic/papers/97/9703.pdf [Accessed 1 Feb. 2012].
  17. Farrell, M.J., 1957. The measurement of productive efficiency. Journal of the Roya Statistical Society, Series A, 120(3): 253–281.
  18. Hassan, M.K., 2006. X – efficiency in islamic banks. Islamic Economics Studies, 13(2): 49 – 78.
  19. Hassan, M.K., A. Al-Sharkas and A. Samad, 2004. An empirical study of relative efficiency of the banking industry in Bahrain. Studies in Economics and Finance, 22(2): 40-69.
  20. Isik, I. and M.K. Hassan, 2002. Technical, scale and allocative efficiencies of Turkish banking industry. Journal of Banking and Finance, 26(4): 719-766.
  21. Jacobs, R., 2001. Alternative methods to examine hospital efficiency: Data envelopment analysis and stochastic frontier analysis. Health Care Management Science, 4(2): 103 – 115.
  22. Kounetas, K. and K. Tsekouras, 2007. Measuring scale efficiency change using a translog distance function. International Journal of Business and Economics, 6(1): 63 – 69.
  23. Manadhar, R. and J. Tang, 2002. The evaluation of bank branch performance using data envelopment analysis: A framework. Journal of High Technology Management Research, 13(1): 1–17.
  24. McAllister, P.H. and D. McManus, 1993. Resolving the scale efficiency puzzle in banking. Journal of Banking and Finance, 17(213): 389-405.
  25. Mokhtar, H.S.A., N. Abdullah and M.S. Al – Habashi, 2008. Efficiency and competitions of islamic banking in Malaysia. Humanomics, 24(1): 28 – 48.
  26. Norman, M. and B. Stoker, 1991. Data envelopment analysis: The assessment of performance. England: John Wiley & Sons Ltd.
  27. Qureshi, M.A. and M. Shaikh, 2012. Efficiency of islamic and conventional banks in Pakistan: A non-parametric approach. International Journal of Business and Management, 7(7): 40 – 50.
  28. Sanchez, I., 2009. Technical and scale efficiency in Spanish urban transport: Estimating with data envelopment analysis. Available from http://www.hindawi.com/journals/aor/2009/721279 [Accessed 1 Feb 2012].
  29. Sathye, M., 2001. X – efficiency in Australian banking: An empirical investigation. Journal of Banking & Finance, 25(3): 613 – 630.
  30. Shahooth, K., A.H. Battall, K. Al – Delaimi and Al – Ani, 2006. Using data envelopment analysis to measure cost efficiency with an application on islamic banks. Scientific Journal Administrative Development, 4: 134 –156.
  31. Tecles, P.L. and B.M. Tabak, 2010. Determinants of bank efficiency: The case of Brazil. European Journal of Operational Research, 207(3): 1587–1598.
  32. Thanassoulis, E., 2003. Introduction to the theory and application of data envelopment analysis. Text Book, Library of Congress Control Number: 2001034441.
  33. Wheelock, D.C. and P.W. Wilson, 1999. Technical progress, inefficiency and productivity changes in US banking 1984-1993. Journal of Money, Credit and Banking, 31(2): 212 - 234.
  34. Zhu, J., 2003. Quantitative models for performance evaluation and benchmarking: Data envelopment analysis with spreadsheets and DEA excel solver. Massachusetts, USA: Worcester Polytechnic Institute.

Statistics:

Google Scholor ideas Microsoft Academic Search bing Google Scholor

Funding:

Competing Interests:

Acknowledgement:


Related Article

( 1 ) Measuring the Gap Between the Syrian Accounting Qualifications and the International Accounting Education Based on IES 2 and IES 3
( 2 ) Measuring the Quality of Islamic Banks Services and Its Impact on Customers Satisfaction A Survey Study on the Islamic Banks Customers in Lattakia-Syria
( 3 ) Measuring Efficiency in Banks: A Brief Survey on Non – Parametric Technique (Data Envelopment Analysis)
( 4 ) Measuring the Quality of Health Services in Lattakia Province Patients' Perspective (Field Study of Health Centers in Jableh City)
( 5 ) Measuring and Assessing the State of Technological Innovations and the Level of Interaction between Rice Processors and Stakeholders in Rice Processing Industry in Nigeria
( 6 ) Evaluating the Effectiveness of CAPM and APT for Risk Measuring and Assets Pricing
( 7 ) The Technical Efficiency of Collective Irrigation Schemes in South-Eastern of Tunisia
( 8 ) Comparative Analysis of Technical Efficiency of Milk Production Systems in Uasin Gishu County of Kenya
( 10 ) Estimating the Economic Determinants of Technical Efficiency of Bioenergy in EU-28: An Application of Tobit Analysis
( 11 ) Efficiency of Microfinance (MF) Institutions in Bangladesh: A Study on Top 10 MF Institutions
( 13 ) The Impact of Investment Climate Reforms on the Development of Small and Medium Sized Enterprises in Nigeria: A Policy Brief
( 15 ) A Brief Survey of the House Allocation Problems
( 16 ) Survey of Students’ Academic Achievement and Mathematics Identity-Formation
( 20 ) New Evidence on the Link Between Income Inequality and Misery Index: A Nonlinear Time Series Analysis
( 21 ) The Phenomenon of Money Politics and Nigeria’s Democratization: An Exploration of the Fourth Republic
( 23 ) Appointment of Directors and Performance of Deposit Money Banks in Sub Saharan Africa: Do We Need More Executive or Non-Executive Directors?
( 24 ) Corporate Funding and Sustainability of Non- Governmental Organizations in Africa
( 25 ) Determining Rural Poverty in Manga Del Cura – Ecuador Non Delimited Zone
( 26 ) Does the Holiday Effect Differ from Religious to Non-Religious Holidays? Empirical Evidence from Egypt
( 27 ) Nexus between Non-Oil Sectoral Contribution and Economic Growth in Nigeria 1981-2018
( 28 ) An Empirical Investigation of Real Exchange Rate Responses to Foreign Currency Inflows: Revisiting the Dutch Disease Phenomenon in South Asia
( 29 ) Do Derivative Instruments Increase Firm Risk for Indonesia Non-Financial Companies?
( 30 ) Does Capital Structure Affect the Profitability of Listed Family and Non-Family Firms? Evidence from Bangladesh
( 31 ) Deficit Financing Asymmetry and Nigerias Economic Growth: A Nonlinear Autoregressive Distributed Lag Approach
( 32 ) Non-Linear Effects of Intellectual Property Rights on Technological Innovation: Evidence from Emerging and Developing Countries
( 33 ) Driving Role of Institutional Investors in the Indian Stock Market in Short and Long-Run – An Empirical Study
( 34 ) Challenges of Human Rights Abuses in Nigerian Democratic Governance – Which Way Forward ?
( 35 ) The Association Between Corporate Risk Disclosure and Firm Performance in Emerging Country – The Case of Egypt
( 36 ) The Potential of Rural–Urban Linkages for Sustainable Development and Trade
( 37 ) The Total Factor Productivity of Libyan Banks, 2004 – 2010