Efficiency of the Macedonian banking sector

Naumovska, Elena; Cvetkoska, Violeta

doi:10.2298/yjor150228019n

Cited by 10 publications

(15 citation statements)

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“…In such terms, certain insufficiencies in the accounting indicators approach to efficiency measurement can be eliminated and conclusions about the efficiency can be improved using the DEA approach. Application of the DEA methodology in efficiency measurement has a wide scope and has been used extensively to assess school efficiency [23,28]; hospital efficiency [13]; bank efficiency [1,4,12,14,15,17,19,20,21,22,24,25,26,27]; insurance company efficiency [9,10,15,18], etc. In reviewing the literature, the conclusion is that most studies deal with similar approaches in measuring the relative efficiency of banks over a period of time.…”

Section: Literature Reviewmentioning

confidence: 99%

“…No significant difference between performance of banks in different entities of Bosnia and Herzegovina and those smaller and larger banks were noticed. A comparative analysis of banking sector efficiency indicators in the Republic of Macedonia in the period from 2007 to 2012 and the 16 CSEE countries for the period [2003][2004][2005][2006][2007][2008][2009][2010][2011][2012] shows that the values of observed indicators shifted around the average value for the entire analyzed sample, suggesting that countries with banking sectors that exhibit lower operating costs had a higher level of financial deepening and greater degree of financial intermediation [20]. At the same time, results of DEA approach suggest that the group of large banks with the highest efficiency was in the Macedonian banking sector.…”

Section: Literature Reviewmentioning

confidence: 99%

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Measurement of cost efficiency in the European banking industry

Tuškan

Stojanović

2016

Croat. Oper. Res. Rev.

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Abstract. In this paper we analysed and compared efficiency results in the banking industry using two different approaches: financial indicators and the Data Envelopment Analysis (DEA) methodology. In the indicator-based approach, we used chosen accounting ratios (Return on Assets -ROA, Return on Equity -ROE and Cost to Income Ratio -CIR) and the descriptive statistics methodology to conduct analysis. In the case of DEA, a nonparametric linear programming methodology approach, expenses as input data and income as output data are used for measuring efficiency using the CCR DEA model, BCC DEA model and window analysis DEA technique. The objective of this research is ascertain whether a correlation exists between the results of the different ways of measuring efficiency. In that sense, the main purpose of this research is to draw a more precise conclusion about the efficiency of the banking industry, as tested for the period 2008-2012 on a sample of 28 European banking systems.The main difference in the obtained results is a lag of values of average accounting ratios in comparison to the results of the DEA methodology. Such a finding suggests that the DEA methodology can be useful in detecting early signs of inadequate business strategies, which can lead to the slowdown of business activity or poorer efficiency results. This can be especially important in times of an unstable financial or macroeconomic environment, as it can assist in detecting early signs of a crisis. In general, the results of both approaches suggest that banking systems in post-transition countries have a higher cost efficiency. Such systems continue to be dominantly financed through long-term deposits and are also exposed to a specific risk. They do business in a specific competitive, financial and macroeconomic environment that significantly influences the prices of financial services (i.e. higher margins), and as a consequence, leads to potentially higher banking sector earnings.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Measurement of cost efficiency in the European banking industry

Tuškan

Stojanović

2016

Croat. Oper. Res. Rev.

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“…Although the financial sector in both countries is improving, they are still relatively underdeveloped and inefficient (c.f. Giustinani & Ross, 2008, and Naumovska & Cvetkoska, for Macedonia and Vorobey, and Gicquel et al. for Kyrgysztan).…”

Section: Introductionmentioning

confidence: 98%

The Effect of Remittances on Economic Growth in Kyrgyzstan and Macedonia: Accounting for Financial Development

Kumar

Stauvermann

Patel

et al. 2017

International Migration

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Kyrgyzstan and Macedonia have experienced a reasonable increase in remittances over the last twenty-five years. Subsequently, the extent to which remittances can be instrumental for economic development of the two countries has gained serious attention in recent development dialogues. The aim of this study is to examine the impact of remittances versus financial development on the economic growth of the two counties, complementing the burgeoning interest and focus on remittances for policy. The short-run and the long-run effects and the causality dynamics of remittances and financial development, are explored. The results show a long-run positive impact of remittances on the economic growth of these countries. The impact of financial development is negative, significant only for Kyrgyzstan and not statistically significant for Macedonia. The causality results show that remittances support economic growth for Kyrgyzstan, whereas economic growth appears to propel remittances for Macedonia.

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“…In the Republic of North Macedonia, the authors have found the following papers regarding the application of DEA in banks: Micajkova and Poposka [17], Naumovska and Cvetkoska [18], Naumovska and Cvetkoska [19], and FotovaČiković and Cvetkoska [12] ( Table 1).…”

Section: Literature Reviewmentioning

confidence: 99%

“…The average efficiency of the Macedonian banking sector has been the highest in 2008 (90.35%) and the lowest in 2012 (79.83%). Naumovska and Cvetkoska [19] 2007-2013 Inputs -deposits and operating costs; Outputs -loans and net interest revenue…”

Section: Ccr (Outputoriented)mentioning

confidence: 99%

Assessing the relative efficiency of commercial banks in the Republic of North Macedonia: DEA window analysis

Cvetkoska

Čiković²

2020

Cro. Oper. Res. Rev.

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The aim of this paper is to assess the relative efficiency of commercial banks in one developing country, i.e. the Republic of North Macedonia by using the data envelopment analysis (DEA) technique-window analysis. The selection of inputs and outputs plays a key role when applying DEA for assessing the efficiency of decision-making units (DMUs). In the conducted research two inputs and two outputs have been selected. The sample consists of 14 commercial banks and the period that is being observed is an eleven year span from 2007 to 2017. According to the average efficiency score for the whole observed period, the most efficient bank belongs to the group of large banks, which simultaneously shows the highest efficiency. The banking sector in the Republic of North Macedonia, as a whole, showed the highest efficiency in 2007, and the lowest efficiency in 2011.

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Efficiency of the Macedonian banking sector

Cited by 10 publications

References 0 publications

Measurement of cost efficiency in the European banking industry

Measurement of cost efficiency in the European banking industry

The Effect of Remittances on Economic Growth in Kyrgyzstan and Macedonia: Accounting for Financial Development

Assessing the relative efficiency of commercial banks in the Republic of North Macedonia: DEA window analysis

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