Technical Efficiency of Banks in Central and Eastern Europe

Horvátová, Eva

doi:10.3390/ijfs6030066

Cited by 7 publications

(7 citation statements)

References 28 publications

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“…(1) Like other emerging countries, the empirical evidence to the influence of technical efficiency on bank performance is limited in India. Technical efficiency of banks refers to their ability to obtain the maximum amount of output by using a given volume of inputs or the ability to produce a given volume of output using minimum amount of inputs (Horvatova, 2018). We have adopted the intermediation approach (Sealey and Lindley, 1977) to define the inputs and outputs necessary to carry out the technical efficiency analysis.…”

Section: Introductionmentioning

confidence: 99%

Technical efficiency, intellectual capital efficiency and bank performance in emerging markets: the case of India

Maji

Hussain

2021

JAMR

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PurposeThis paper examines the impacts of technical efficiency and intellectual capital efficiency (ICE) on bank performance in India after controlling other bank-, industry-specific and macroeconomic variables.Design/methodology/approachThe authors use secondary data on listed Indian commercial banks for the period 2005–2018. The authors use data envelopment analysis (DEA) technique-based Malmquist index (MI) to obtain technical efficiency and value-added intellectual coefficient (VAIC) model for computing ICE. System generalized method of moments (GMM) (SGMM) model in a dynamic framework is used to estimate the parameters, which takes into consideration issues of endogeneity, heterogeneity and persistence of bank performance. Further, the authors use quantile regression model to examine whether the impacts of covariates are homogeneous at different locations of the conditional distribution of bank performance.FindingsThe authors find positive impact of technical efficiency and negative influence of market concentration on bank performance. The results of the study support the efficient structure (ES) hypothesis (ESH). The authors observe positive influence of intellectual capital (IC) on bank performance, which indicates the relevance of intellectual resources in enhancing banks' value. Further, the results of quantile regression indicate that the impacts of technical efficiency and ICE are more pronounced at higher quantiles of the conditional distribution of bank performance.Originality/valueThis paper in the Indian context examines the influences of technical efficiency and ICE after controlling bank-, industry-specific and macroeconomic factors.

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Section: Introductionmentioning

confidence: 99%

Technical efficiency, intellectual capital efficiency and bank performance in emerging markets: the case of India

Maji

Hussain

2021

JAMR

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“…The CEE region includes countries that went through restructuring of the banking system at the end of the XX century. Depth and stability of financial system, structure of financial investments, technical efficiency of the banking sector, regulatory measures, loan growth, internationalization of the banking sector, ability of banks to overcome crises, and soundness of banks are at the core of studies (e.g., European Investment Bank, 2020; Kočenda & Iwasaki, 2020;Vunjak et al, 2020;Horvatova, 2018;Gallizo et al, 2017;Lapteacru, 2017;Iwanicz-Drozdowska & Witkowski, 2016;Jočiene, 2015;Nitoi & Spulbar, 2015;Li & Ferreira, 2011;ECFIN Economic Brief, 2010;EC Directorate-General for Economic and Financial Affair, 2010;Brada et al, 2021;Agoraki & Kouretas, 2021). The characteristics of the banking sector in the CEE region are useful for understanding research results.…”

Section: Discussionmentioning

confidence: 99%

Linking Institutional Factors with the Financial Soundness of Banks. Evidence from the CEE Region

2023

EJSD

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Sustainable financial sector needs the sound banking system. The soundness of the banking system is the subject for effects from institutional factors representing the areas of economy, society, public sector, legislation, technologies, and climate change. Although, studies rarely pay attention to the complex approach, where all areas are analysed simultaneously within the study. Design of the present study aims to analyse institutional factors of interdisciplinary nature, which demonstrate potential significance for the sound banking system. The authors focus on the cases that differ by the level of the soundness of banks. The approach provides the novelty of research. Method. During the research, the authors identify and characterise linkages between the factors of institutional environment and the soundness of banks. For the aim, monographic method and correlation analysis are applied. Analysis. The analysis is organised by using two cases that differ by the level of the soundness of banks -the region of Central and Eastern Europe and ten countries with the highest level of the soundness of banks in the world according to the data on Global Competitiveness Report. Results. For the cases that differ by the level of the soundness of banks, the research results demonstrate similarity by the linkages with indicators representing depth of financial system and corporate governance. Differences between the cases appear by the linkages with indicators representing public sector performance and stability of financial system. Conclusions. For the case with lower level of the soundness of banks, overall trends that are necessary for functioning of the sound banking system are observed. Although, several indicators that by their sense are significant for the sound banking system demonstrate negative direction or weak relationship with the soundness of banks what has to be improved in the future and appear as a result of the peculiarities of the banking sector in the region.

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“…It calculates the performance of similar units, called DMUs, using multiple metrics to determine their performance. Sherman and Gold (1985) were the first to employ this method in the banking industry, and it has been used for efficiency scores computation in numerous banking studies (Andries, 2011;Haralayya & Aithal, 2021;Horvatova, 2018;Kočišová, 2013). As a result of its many advantages, DEA was found to be more preferred in banking than its proximate rival, stochastic frontier analysis (SFA).…”

Section: Methodsmentioning

confidence: 99%

Benchmarking Performance using Data Envelopment Analysis: A Case of the Banking Sector of Pakistan

Khan¹,

Khan

Ahmad

2022

GIRR

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Customers' needs drive the competitive nature of today's business environment. To achieve desired outcomes, resources must be transformed effectively and efficiently. Performance evaluation is one of the most important benchmarking tools for modern businesses due to sophisticated technologies, computerized processes, communication, and fierce competition. The study analyzed the performance of 26 commercial banks from 2008 to 2016. Efficiency and effectiveness were calculated using data envelopment analysis(DEA). The results showed that the sub-optimal performance of banks was caused mainly by ineffectiveness compared to Efficiency. Banks were further categorized into four groups based on their average efficiency and effectiveness scores into Ace, Underdogs, Lucky, and Unlucky. This matrix suggests that banks in the Lucky quadrant should improve Efficiency, those in the Unluck group should diversify, and those in the Underdogs quadrant should merge. Banks in the Lucky, Unlucky, and Underdog quadrants should emulate the Ace quadrant's success.

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Technical Efficiency of Banks in Central and Eastern Europe

Cited by 7 publications

References 28 publications

Technical efficiency, intellectual capital efficiency and bank performance in emerging markets: the case of India

Technical efficiency, intellectual capital efficiency and bank performance in emerging markets: the case of India

Linking Institutional Factors with the Financial Soundness of Banks. Evidence from the CEE Region

Benchmarking Performance using Data Envelopment Analysis: A Case of the Banking Sector of Pakistan

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