Decomposition of the technical efficiency of the banking system

Abel, Sanderson; Bara, Alex; Roux, Pierre Le

doi:10.4102/jef.v11i1.160

Cited by 6 publications

(9 citation statements)

References 24 publications

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“…It assesses how far a firm can reduce its inputs (in a fixed proportion) while remaining within the variable return to scale (VRS) frontier (Iqbal & Awan, 2015). Scale efficiency, on the other hand, refers to the relationship between the output level and average cost; thus, it is related to the size of an organization's operation (Abel & Bara, 2017). It is a parameter that indicates a firm's operation at an optimum scale size (Huguenin, 2012).…”

Section: Theoretical Backgroundmentioning

confidence: 99%

“…Firms that can change their output level should use this model orientation (Forbes et al, 2010). Indeed, the orientation of output and input determines the point on the efficient frontier to use as a benchmark (Abel & Bara, 2017).…”

Section: Theoretical Backgroundmentioning

confidence: 99%

“…This study employed the DEA model to measure the technical efficiency of the listed IT companies in Bangladesh, as there are two input and three output variables. Following the study of Abel and Bara (2017), the model for measuring technical efficiency is shown in equation 1.…”

Section: 𝐸𝑓𝑓𝑖𝑐𝑖𝑒𝑛𝑐𝑦 = 𝑂𝑢𝑡𝑝𝑢𝑡 𝐼𝑛𝑝𝑢𝑡mentioning

confidence: 99%

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Measuring the technical efficiency of the listed IT companies: Evidence from Bangladesh

Hossain

Salam²,

Nahid³

2022

IJRBS

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This study aimed to measure the technical efficiency of information technology (IT) companies listed on the Dhaka Stock Exchange (DSE) in Bangladesh. It included ten listed IT companies for the period 2016–2020. The input-oriented Data Envelopment Analysis (DEA) approach was used to measure technical efficiency. This study used two inputs, such as fixed assets and capital expenditure, and three outputs, such as return on equity, return on assets, and total income, to measure technical efficiency. All the required data were collected from publicly available annual reports, the sample companies’ websites, and the website of DSE. The study found that Bangladeshi-listed IT companies were not adequately technically efficient, with an average efficiency score of 56.6 percent, requiring a 43.6 percent improvement in efficiency during the period 2016–2020. This inefficiency was due primarily to pure technical inefficiency followed by scale inefficiency. The findings of the study are expected to provide important and useful information to the Bangladesh Association of Software and Information Services (BASIS), the Bangladesh Computer Council (BCC), the ICT Division of the Bangladesh government, and the sample companies.

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Section: Theoretical Backgroundmentioning

confidence: 99%

Section: Theoretical Backgroundmentioning

confidence: 99%

Section: 𝐸𝑓𝑓𝑖𝑐𝑖𝑒𝑛𝑐𝑦 = 𝑂𝑢𝑡𝑝𝑢𝑡 𝐼𝑛𝑝𝑢𝑡mentioning

confidence: 99%

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Measuring the technical efficiency of the listed IT companies: Evidence from Bangladesh

Hossain

Salam²,

Nahid³

2022

IJRBS

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“…The bank faces the dilemma of undersizing (oversizing) to increase (decrease) returns to scale, resulting in operations below (above) the ideal size. If the output changes appropriately with the growth or reduction in inputs, the organization is scale efficient (Abel and Bara, 2017).…”

Section: Data Envelopment Analysismentioning

confidence: 99%

The Impact of Financial Technology on Banking Sector: Evidence from Egypt

Marwa

2022

ijfirm

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Purpose: Financial technology is now critical for each firm to ease and simplify commercial transactions. The purpose of this study is to examine the efficiency of the banks in Egypt after the spread of FinTech. Design/Methodology/Approach: The shortage of studies in this field in Egypt is presented as the paper's concern. Financial statement data were used for a period from 2014-2020 from the CBE Egyptian bank with Fintech collaborations. Three alternative models with different input-output combinations were developed, based on production, profitability, and intermediation dimensions to evaluate the banks' efficiency using DEA technique. Findings: The results revealed that the Egyptian banks' efficiency does not relatively improved by introducing the financial technology except for deposits and total loans. Research implications: This study contributes to the literature on the adoption status of Fintech services in Egypt and its impact on the banks' efficiency. Egyptian banks need to find more innovative ways to accelerates the transforming of the Egyptian society into a nonmonetary society. Originality/value: This study holds significance as it provides the empirical evidence for insufficient improving Egyptian banks' efficiency by introducing the financial technology except for deposits and total loans and the necessity to rushes the renovating of the Egyptian society into a non-monetary society as a part of the Egypt's 2030 Sustainable Development Plan.

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“…Beck et al (2013) found that there is a higher degree of foreign bank penetration in low and middle-income countries as compared to high-income countries both in terms of number and assets of foreign banks. Abel et al (2017) pointed out that the banking and financial systems in low-income countries and middle-income countries are less open internationally compared to higher-income countries. In terms of bank ownership, Dietrich and Wanzenried, (2011) found that the public ownership of banks is higher in lowincome countries than in middle-or high-income countries, as 20% of all banks in low-income countries are either fully or partially owned by the state.…”

Section: Bank Efficiency and Countries Income Classificationsmentioning

confidence: 99%

The Determinants of The Bank Regulation and Supervision on The Efficiency of Islamic Banks in Different Country’s Income Level

Noor¹,

Bakri²,

Yusof³

et al. 2020

JAFEB

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This study investigates the impact of the country's governance on the revenue efficiency of 108 Islamic banks from 26 countries offering Islamic banking and finance products services. The technical efficiencies of individual Islamic banks have been analyzed using the Data Envelopment Analysis method. The data will be pooled across the selected countries and utilize the intermediation approach. The Ordinary Least Square estimation method is employed to examine the impact of country supervision and regulation on the technical efficiency of Islamic banks. As robustness check, the study examines the impact of the level of bank regulations and supervision on the efficiency of Islamic banks operating in different income-level countries. The results found that the stricter the supervisory power, the less strict capital requirement, the tighter the restrictions on non-banking activities, and the stricter the private monitoring enhance statistically significantly the level of efficiency of Islamic banks. In upgrading the regulations and supervision of the Islamic banks, the existing regulatory framework based on the Basel Committee on Banking Supervision (BCBS) must be complemented with the prescriptions on Islamic banking or Shariah compliance diligently, so that the Islamic banks could be regulated accurately and further improve the technical efficiency of their operations.

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Decomposition of the technical efficiency of the banking system

Cited by 6 publications

References 24 publications

Measuring the technical efficiency of the listed IT companies: Evidence from Bangladesh

Measuring the technical efficiency of the listed IT companies: Evidence from Bangladesh

The Impact of Financial Technology on Banking Sector: Evidence from Egypt

The Determinants of The Bank Regulation and Supervision on The Efficiency of Islamic Banks in Different Country’s Income Level

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