A Slacks-based Measure DEA Methodology for Identification of Returns to Scale in the Slovak Banking Sector

Boďa, Martin

doi:10.11118/actaun201563061847

Cited by 5 publications

(4 citation statements)

References 10 publications

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“…In respect of the former, the entire analysis was carried out under the assumption of variable returns to scale insomuch as they answer the empirical technology and allows also for benchmarking against the production units that do not operate at their optimum scale size. This also corresponds to the findings of Boďa [2015] who claims that Slovak commercial banks operate prevalently at variable returns to scale. As far as the latter is concerned, a total of 5 DEA models were considered: two BCC models (input and output oriented, BCC-I and BCC-O) and three SBM models (input and output oriented, SBM-I and SBM-O, as well as non-oriented, SBM-N).…”

Section: Methodology and Resultssupporting

confidence: 88%

“…The production approach was adopted e.g. by Boďa [2015] or Boďa andZimková [2014, 2015] who select in their efficiency investigations input and output variables that are typical of the production approach. On the contrary, Kočišová [2012] claims that she applies the production approach; yet, her choice of inputs and outputs does not attest to this assertion since deposits are found on the side of inputs.…”

Section: Banks As Production Facilities Of Financial Intermediariesmentioning

confidence: 99%

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On the Comparability of the Production and Intermediation Approach in Banking Efficiency Studies

Piklová¹,

Boďa²

2018

PRACE NAUKOWE UNIWERSYTETU EKONOMICZNEGO WE WROCŁAWIU

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The paper analyses the question of comparability of results that arise from application of the production and intermediation approach in practical efficiency measurement in banking. Its goal is to assess the comparability or congruence of efficiency scores yielded by these two approaches when applied in a case study of Slovak commercial banks for a period of 11 years between 2005 and 2015, using data envelopment analysis (DEA). The paper acknowledges that the chief distinction between the two approaches residing in the treatment of deposits passes into the resulting efficiency scores and troubles their comparability.

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Section: Methodology and Resultssupporting

confidence: 88%

Section: Banks As Production Facilities Of Financial Intermediariesmentioning

confidence: 99%

On the Comparability of the Production and Intermediation Approach in Banking Efficiency Studies

Piklová¹,

Boďa²

2018

PRACE NAUKOWE UNIWERSYTETU EKONOMICZNEGO WE WROCŁAWIU

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“…The production approach in measuring the technical efficiency of banks in the Slovak banking sector was mainly applied by authors: Boda (2015Boda ( , pp. 1847Boda ( -1858, Boda and Zimkova (2014, pp.…”

Section: Literature Reviewmentioning

confidence: 99%

Comparison of the efficiency measurement of the conventional and Islamic banks

Musa

Natorin

Musová

et al. 2020

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Research background: Islamic banks appeared on the world scene as active players over two decades ago. Many of the principles upon which Islamic banking is based have been commonly accepted all over the world. Financial institutions driven by Islamic principles acquire new clientele without excessive marketing, due to preservation of conservative values. Contrary to the conventional investment banks, their value is based on real money, and not on virtual activities from swap and derivative assets. Competition between conventional (or traditional) and Islamic banks is increasing every day, moreover, Islamic financial institutions are more resistant to the crisis. Our study contains analysis and comparison of economic efficiency of the conventional and Islamic banks. Besides the fact that traditional and Islamic banks apply inputs differently, the reason of better efficiency of Islamic banks may be connected with different approach to the risk management and control of the banking operations by the Sharia commission. Purpose of the article: The main aim of the article is to compare the economic efficiency of the conventional and Islamic banks in Europe. Methods: To achieve the aim of the paper, firstly the selected financial indicators of traditional and Islamic banks in Europe were compared. The second, the analysis of the economic efficiency of the selected 1460 conventional and Islamic financial institutions using DEA methods was conducted. Findings & Value added: Research results indicated methodological differences in the economic efficiency measuring in the Islamic banks. At the same time, the higher economic efficiency of Islamic banks was confirmed. The results are motivating for the follow-up investigation into the causes of higher efficiency of Islamic banks compared to traditional banks.

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“…Variable returns to scale are favoured since it is scarcely to be expected that links between inputs and outputs in bank branch production are ideally proportional. The validity of this choice can be easily justified by the procedure for identification of returns to scale working in an SBM framework proposed by Boďa (2015). The details are not reported here for their marginal relevancy, but this procedure indicates that most of the bank's branches have their operations at variable returns to scale.…”

Section: Setting Of the Bank's Branch Performance Assessment And Datamentioning

confidence: 99%

Spatial Aspect in Bank Branch Performance Management

Boďa

Zimková

2019

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In spite of the fact that both profitability and technical efficiency of bank branches are greatly influenced by the local environment in which they are located and operate, local environmental factors are scarcely incorporated in performance assessments undertaken by banks themselves. The paper stresses that localization of bank branches (i.e. their spatial aspect standing for all local socioeconomic environmental influences) is a significant factor that should be part of their performance assessment and demonstrates this for a commercial bank that runs a large retail branch network all over Slovakia. Through a case study of this Slovak bank, the paper aims to highlight the importance of the spatial aspect in explaining efficiency and economic results of bank branches, and to sketch a set of analytical procedures that may be adopted by commercial banks in internal performance assessment. Insights of geostatistics are employed in investigating the relationship between technical efficiency and profitability exhibited by the bank's branches and studying how this relationship is affected by the spatial aspect. Whereas technical efficiency stands for the voluminal dimension of a branch's performance, the profitability captures the monetary effects of the achieved performance position of a branch. It is found that for the bank's branches technical efficiency and profitability are closely related, and it is shown how this finding is relevant for bank branch performance management. A practical outcome of the analysis is that technical efficiency can be adopted by commercial banks in their internal rating systems of branch performance as a fully informative measure allowing them to assess managerial skills at a branch level. Technical efficiency scores may thus be utilized as a means of monetary stimulation of the best performing branches or in developing corrective policy strategies to manage the worst performing ones. Nonetheless, what is required is that the spatial aspect is sufficiently appreciated.

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A Slacks-based Measure DEA Methodology for Identification of Returns to Scale in the Slovak Banking Sector

Cited by 5 publications

References 10 publications

On the Comparability of the Production and Intermediation Approach in Banking Efficiency Studies

On the Comparability of the Production and Intermediation Approach in Banking Efficiency Studies

Comparison of the efficiency measurement of the conventional and Islamic banks

Spatial Aspect in Bank Branch Performance Management

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