Determinants of bank efficiency in Turkey: Participation banks versus conventional banks

Batir, Tuğba Eyceyurt; Volkman, David A.; Güngör, Bener

doi:10.1016/j.bir.2017.02.003

Cited by 82 publications

(61 citation statements)

References 24 publications

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“…sharply. This finding is consistent with that of Batir et al (2017) who pointed out that high inflation caused the efficiency of banks to decline.…”

Section: Non-parametric Regressionsupporting

confidence: 93%

Incorporating Credit Quality in Bank Efficiency Measurements: A Directional Distance Function Approach

Qayyum

Riaz

2018

JRFM

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The objective of the study was to measure the risk-adjusted efficiency of banks in 24 emerging economies for the period of 1999-2013. A two-stage network data envelopment analysis (DEA), with separate deposit mobilization and loan financing stages was used. Efficiency was measured using directional distance functions with DEA, featuring non-performing loans as undesirable outputs. The distributions of efficiency scores were different when credit quality was taken into account. The distribution of efficiency scores varied systematically with accumulation of non-performing loans across regions. The financial crisis of 2007-2008 impacted more adversely the regions that had higher proportions of non-performing loans in banks' portfolios. The results of a follow-on non-parametric regression showed that smaller, better capitalized, and private banks were more efficient. The conditions conducive for high levels of technical efficiency by banks were found to be characterized by economic growth and low inflation.Most previous studies used either the production or the intermediation approach to model bank efficiency.

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“…sharply. This finding is consistent with that of Batir et al (2017) who pointed out that high inflation caused the efficiency of banks to decline.…”

Section: Non-parametric Regressionsupporting

confidence: 93%

Incorporating Credit Quality in Bank Efficiency Measurements: A Directional Distance Function Approach

Qayyum

Riaz

2018

JRFM

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“…When we examined the academic studies of participation banks in Turkey we came to know that, the causality relationship between profit share rates and deposit interest rates, the effects of macroeconomic changes on participation banks, the analysis of deposit returns and the risk of interest rates on participation banks have been investigated (Charap and Cevik, 2011;Sarac and Zeren, 2015;Ata et al, 2016;Aysan et al, 2017;Yuksel et al, 2017;Tekin et al, 2017;Minny and Gormus, 2017;Koc, 2018;Dinc, 2019). Saleh and Zeitun (2006), Erturk and Yuksel (2013), Gokalp (2014), and Eyceyurt and Gungor (2016) investigate the participation banks' profitability in pre and post-crisis periods. They found that the recent global crisis had an effect on the profitability of participation banks.…”

Section: Literature Reviewmentioning

confidence: 99%

Multiple Structural Breaks in Profit Share Rates of Participation Banks in Turkey: Are They Caused by the Recent Global Crises?

Erdaş¹

2020

TUJISE

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The global crises not only affect the economy of the country in which they emerge but also spread to other countries. Economic growth and stability levels will inevitably be affected by these crises especially in developing countries. To this end, the aim of this study is to identify the multiple structural breaks in profit share rates by employing the methodology developed by Bai and Perron (1998, 2003a) and Liu et al. (1997). I used the monthly data covering the period 1998-2018 for the estimated structural break dates. The results of the analysis indicate that there is at least one breakpoint in the time series of the analysed profit share rates. The identified break dates obtained within the study confirm the periods affected by the global crises in 2000-2001 and 2007-2008. Under those results, it is revealed that the participation banks have been exposed to structural changes at various times and it may be emphasized that the profit share rates have become more deteriorated to changes in the global financial market.

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“…Hoff, 2007) and employed in efficiency studies in banking (e.g. Batir et al, 2017;Doan et al, 2018) or elsewhere (e.g. Turner et al, 2004;Sağlam, 2018).…”

Section: Instruments Adopted For Spatial Pattern Explorationmentioning

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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Determinants of bank efficiency in Turkey: Participation banks versus conventional banks

Cited by 82 publications

References 24 publications

Incorporating Credit Quality in Bank Efficiency Measurements: A Directional Distance Function Approach

Incorporating Credit Quality in Bank Efficiency Measurements: A Directional Distance Function Approach

Multiple Structural Breaks in Profit Share Rates of Participation Banks in Turkey: Are They Caused by the Recent Global Crises?

Spatial Aspect in Bank Branch Performance Management

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