Bank efficiency and industry growth during financial crises

Diallo, Boubacar

doi:10.1016/j.econmod.2017.03.011

Cited by 59 publications

(58 citation statements)

References 23 publications

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“…This model is frequently used in measuring banking efficiency (Diallo 2018;Paradi et al 2018;Titko et al 2014;Chen et al 2013;Paradi and Zhu 2013;Cooper et al 2011;Zhu 2009). Table 3 summarises the statistical measures calculated for each individual bank in a sample.…”

Section: Resultsmentioning

confidence: 99%

“…As agents, they actively contribute to the efficient reallocation of resources in the market, fund enterprise projects, thus promote economic growth, maintain long-term relationships with companies, solve the problem of information asymmetry and share risk, mitigating economic fluctuations. Diallo (2018) states that efficiency makes banks more resilient to shocks, thereby positively and significantly affecting growth. Belke et al (2016) study show that relatively more profit-efficient banks foster growth in their region.…”

Section: Introductionmentioning

confidence: 99%

“…The literature on the banking sector efficiency in the emerging European countries is increasingly growing (Diallo 2018;Cevik et al 2016;Belke et al 2016;Ferreira 2012;Roghanian et al 2012;Fung and Cheng 2010;Kutsomanoli-Filippaki et al 2009). The efficiency of the banking industry influences the cost of financial intermediation and the overall stability of the financial system, as banks constitute the backbone of financial markets in the Central and Eastern European (CEE) economies.…”

Section: Introductionmentioning

confidence: 99%

“…Hence, an improvement of banking performance indicates better allocation of financial resources resulting in an increase in investment that favors growth (Cevik et al 2016). Diallo (2018) stresses the importance of the quality of the financial sector, i.e., its efficiency. Kutsomanoli-Filippaki et al (2009) emphasize that the efficiency of the banking sector is of vital importance from both the microeconomic and macroeconomic perspectives.…”

Section: Introductionmentioning

confidence: 99%

“…Nowadays, well-functioning financial markets and banking institutions are usually considered to be a condition favourable to economic growth (Diallo 2018;Belke et al 2016;Cevik et al 2016;Zhang et al 2016;Destefanis et al 2014;Roghanian et al 2012;Ferreira 2012;Balkevicius 2012;Waheed and Younus 2010). Banks, being among the most important participants in the financial system, play an important role in it.…”

Section: Introductionmentioning

confidence: 99%

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Measuring the Efficiency in the Lithuanian Banking Sector: The DEA Application

Novickytė

Droždz

2018

IJFS

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Abstract:The purpose of this study is to examine the efficiency of the banks in Lithuania by employing the DEA method and evaluate bank performance in a low interest rate environment. The efficiency scores were calculated with a non-parametric frontier input-oriented DEA technique with the variable returns to scale (VRS) and the constant returns to scale (CRS) assumptions. Five alternative models with different input-output combinations were developed, based on production, profitability and intermediation dimensions. The main bank profitability measure-the return on assets (ROA) ratio-was employed to validate the results obtained using the DEA method. The Lithuanian bank's efficiency analysis based on the VRS assumption shows that better results are demonstrated by the local banks. The technical efficiency analysis based on the CRS assumption shows other results: the banks owned by the Nordic parent group and the branches have higher pure efficiency than local banks and have success at working at the right scale. Based on this, it stated that during the 2012-2016 period the larger Lithuanian banks (subsidiaries) applied a more appropriate business model than smaller (local) banks operating in Lithuania. Additionally, this research contributes to the scholarly literature in the field of determinants of bank business performance in concentrated markets dominated by foreign banks and, in particular, from one region.

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Section: Resultsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Measuring the Efficiency in the Lithuanian Banking Sector: The DEA Application

Novickytė

Droždz

2018

IJFS

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Are Ecuadorian banks enough technically efficient for growth? A clinical study

Proaño-Rivera

Feria-Domínguez

2023

Int. J Fin Econ

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In this article, we estimate the technical efficiency ratio for a sample of 24 financial institutions in Ecuador over the period 2015–2019. To do so, we first apply a non‐parametric method such as the data envelopment analysis (DEA). Under variable returns to scale and output‐oriented “Interest Income”, the average technical efficiency for the 24 banks is 84.26% and, under output‐oriented “Other Operating Income”, the average technical efficiency is 73.22%. We find that the group of large banks has higher levels of efficiency and that there are still opportunities for improvement in the group of medium and small banks. We also estimate that 80% of Ecuadorian banks need to make potential improvements either by increasing their output or reducing their inputs, such as salary costs, to increase the efficiency. In addition, the growth of the banking sector is crucial to achieve the financial development in Ecuador, being significant the efficiency indices, which show that a 1% increase in banking efficiency could increase its size by USD 605 million. By using the random effects panel data econometric model, we demonstrate that the growth of the banking industry is mostly influenced by the concentration of deposits and taxes.

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Openness and Potential Fragility of the Global Banking System

Chakrabarti

2022

India Studies in Business and Economics

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Bank efficiency and industry growth during financial crises

Cited by 59 publications

References 23 publications

Measuring the Efficiency in the Lithuanian Banking Sector: The DEA Application

Measuring the Efficiency in the Lithuanian Banking Sector: The DEA Application

Are Ecuadorian banks enough technically efficient for growth? A clinical study

Openness and Potential Fragility of the Global Banking System

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