The Total Factor Productivity of Libyan Banks, 2004 – 2010

Abstract

This paper provides a comparative analysis regarding the performance of 17 Libyan banks over the period 2004 up to 2010. According to the relevant literature, there are few studies that measure both technical efficiency and Malmquist productivity index approach using non -parametric approach (DEA) for the banking sector in Libya. For this study, the DEA technique was used to estimate technical, pure technical, and scale efficiency of sampled banks by using DEAP software. . The results showed that the specialized banks have exhibited higher mean technical efficiency relative to commercial and private banks. This paper concludes with some policy implications of the results. The results for total factor productivity (TFP) showed 11 of 17 Libyan banks decline because TFP levels of banks drawn by negative technical efficiency change (less than 1) or by negative technological change, or both of them are negative.

Technical Efficiency and Its Determinants: A Panel Data Analysis of Indian Public and Private Sector Banks

“…In other words, profitable banks use their assets and resources efficiently, which is why they will earn more profit. This result is consistent with the previous studies of Isik and Hassan (2002), Casu and Molyneux (2003), Hasan and Marton (2003), and Alrafadi (2015).…”

“…In this study, Ray (2007) also suggested that the State Bank of India is too large and should be broken up into more than 25 smaller banks. An increase in the size of banks is a source of additional costs, which tends to reduce the efficiency of the large banks (Alrafadi et al, 2015).…”

“…In another study (Alrafadi, Kamaruddin, & Yusuf, 2015), DEA was used to measure the technical efficiency and its determinants in Libyan banks from 2004 to 2010. In the second stage analysis, identification of the determinants of the efficiency was done using the Tobit regression model and the results exhibited a positive relationship between efficiency and ROA, and capital adequacy and bank size.…”

“…Physical capital (net fixed assets), the number of full-time staff, and loanable funds were selected as input variables (As in Kumar and Verma (2003), Ram Mohan and Ray (2003), Jagwani, B. (2012), Roy, D. 2014, Alrafadi et al 2015). Here, loanable fund is the sum of the deposits and borrowed funds.…”