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Year 2023, Volume: 6 Issue: 1, 58 - 74, 31.07.2023
https://doi.org/10.55065/intraders.1311816

Abstract

References

  • Aleskerov, F., Belousova, V., Ivashkovskaya, I., Pogorelskiy, K. & Stepanova, A. (2009) Cost Efficiency and Shareholders’ Voting Power in Russian Banking. Voting Power in Practice Workshop at the University of Warwick.
  • Asmild, M., Paradi, J. C., Aggarwall, V., & Schaffnit, C. (2004). Combining DEA Window Analysis with the Malmquist Index Approach in a Study of the Canadian Banking Industry. Journal Of Productivity Analysis, 21(1), 67-89.
  • Banker, R. D. (1984). Some models for estimating technical and scale inefficiencies in data envelopment analysis. Management Science, 30, 1078-1092.
  • Berger, A.N. & Humphrey, D.B. (1997) Efficiency of Financial Institutions: International Survey and Directions for Future Research. European Journal of Operational Research, 98.
  • Bougnol, M. L., Dulá, J.H., Retzlaff-Roberts, D. & Womer, N.K. (2005) Nonparametric frontier analysis with multiple constituencies, Journal of the Operational Research Society, 56:3, 252-266, DOI: 10.1057/palgrave.jors.2601816.
  • Cava, P.B., Salgado Junior, Alexandre Pereira, & Branco, Adriel Martins de Freitas. (2016). Evaluation of bank efficiency in brazil: a DEA approach. RAM. Revista de Administração Mackenzie, 17(4), 62-84. https://dx.doi.org/10.1590/1678-69712016/administracao.v17n4p61-83
  • CBR (2018). Review of the banking sector of the Russian Federation. Moscow: Central Bank of Russia. Retrieved from http://www.cbr.ru/eng/analytics/bank_system/obs_eng_186.pdf
  • Charnes, A., Cooper, W.W. & Rhodes, E. (1978) Measuring the efficiency of decision making units. European Journal of Operational Research, 2.
  • Coelli, T.J., Rao, D.S.P., O’Donnell, C.J., Battese, G.E. (2005). An Introduction to Efficiency and Productivity Analysis. Berlin: Springer.
  • Cooper, W.W., Lovell, C.A.K. (2000) New approaches to measures of efficiency in DEA: An introduction.  Journal of Productivity Analysis; Norwell, 13(2).
  • Farrell, M.J. (1957). "The measurement of productive efficiency," Journal of the Royal Statistical Society, 120(3), 253–290. Firdaus, M. F., & Hosen, M. N. (2013). Measurement of Efficiency and Soundness of Islamic Bank Using Two-Stage Data Envelopment Analysis and Modified Camels. Journal Of Islamic Banking & Finance, 30(3), 34-50.
  • Gaganis, C., & Pasiouras, F. (2009). Efficiency in the Greek Banking Industry: A Comparison of Foreign and Domestic Banks. International Journal Of The Economics Of Business, 16(2), 221–237. doi:10.1080/13571510902917533
  • Golovan, S. V. (2006). Factors Influencing the Efficiency of the Russian Bank's Performance. Applied Econometrics. Retrieved from http://pe.cemi.rssi.ru/pe_2006_02_03-17.pdf
  • Green, W. (1997). Frontier Production Functions. In: MH Pesaran & P.Shmidt (Eds.), Handbook of Applied Econometrics, Vol. II: Microeconometrics. Oxford: Blackwell Publishers.
  • Henni, A., & Chachoua, F. (2016). Foreign Banks Efficiency in Algeria: An Application of a non-parametric method. REMAH Journal, (17), 185-200.
  • Hosen, M. N. & Muhari, S. (2014) Analysis Of The Efficiency Levels Of The Sharia Rural Banks In Indonesia Using The Method Of Data Envelopment Analysis (DEA) and ITS Correlation With Camel. Journal Of Islamic Banking & Finance, 31(4), 82-104.
  • Knežević, S., Rakočević, S. & Đurić, D. (2011) Management Accounting in Achieving Competitive Advantage and Bank Controlling. Management (1820-0222) . 2011, Vol. 16 Issue 59, p5-13.
  • Koopmans, T.C. (1951). An Analysis of Production as an Efficient Combination of Activities. T. C. Koopmans, ed. 1971. Activity analysis of Production and Allocation, 7th ed. Yale University Press, New Haven, CT.
  • Kutlar, A., Kabasakal, A., & Babacan, A. (2015). Dynamic Efficiency of Turkish Banks: a DEA Window and Malmquist Index Analysis for 2003-2012. Sosyoekonomi, 23(2), 71-97. doi:10.17233/se.09289
  • Marković, M., Knežević, S., Brown, A. & Dmitrović, V. (2015) Measuring the Productivity of Serbian Banks Using Malmquist Index. Management (1820-0222), (76), 1-10. doi: 10.7595/management.fon.2015.0022
  • Mostafa, M. M. (2009) Modeling the efficiency of top Arab banks: A DEA–neural network approach. Expert Systems With Applications, 36(1), 309-320. doi: 10.1016/j.eswa.2007.09.001
  • Mustafa, S., & Mehmood, B. (2015). Efficiency Change in Pakistan Commercial Banking Sector: A Pre and Post Digital-Restructuring Analysis. Journal Of Emerging Economies & Islamic Research, 3(1), 1-12.
  • Ramakrishna, G., Ramulu, M. & Kumar, B. P. (2016) Financial Crisis and the Performance of Commercial Banks: Indian Experience. Journal of International Economics, 7(2), 35.
  • Resti, A. (1997) Evaluating the Cost-efficiency of the Italian Banking System: What Can Be Learned from the Joint Application of Parametric and Non-parametric Techniques. Journal of Banking and Finance, 21(2), 221–250.
  • Sanjeev, G. M. (2006). Data envelopment analysis (DEA) for measuring the technical efficiency of banks. Vision (09722629), 10(1), 13–27.
  • Shyu, J., Lieu, P., & Chang, W. (2015). How the environment determines banking efficiency: a comparison of banking firms in Taiwan, Hong Kong, and Mainland China. International Transactions In Operational Research, 22(4), 757-770. doi:10.1111/itor.12097
  • Soba, M., Erem, I., & Ceylan, F. (2016). The impact of corporate governance practices on bank efficiency: a case of turkey. Journal Of Suleyman Demirel University Institute Of Social Sciences, 25(3), 305-322.
  • Sufian, F., & Majid, M. A. (2007). Singapore banking efficiency and its relation to stock returns: a dea window analysis approach. International Journal Of Business Studies, 15(1), 83-106.
  • Tran Thi Thu, H., & Bhaiyat, F. (2016). Evaluating the efficiency of Vietnamese commercial banks using data envelopment analysis. Annual International Conference On Accounting & Finance, 48-57. doi:10.5176/2251-1997_AF16.20
  • Vishnyakov, I.V. (2001) A system of methods for assessing commercial banks on the basis of mandatory standards of the Central Bank of the Russian Federation. Economic Science of Modern Russia, 2(1), 57-73.
  • Wanke, P., Azad, M. K., & Barros, C. (2016). Efficiency factors in OECD banks: A ten-year analysis. Expert Systems With Applications, 64208–227. doi:10.1016/j.eswa.2016.07.020
  • Yang, Z. (2009) Bank Branch Operating Efficiency: A DEA Approach. Proceedings of the International MultiConference of Engineers and Computer Scientists 2009 Vol II. IMECS 2009, Hong Kong.

Empirical Analysis Of The Efficiency Of The Banking Sector In Western Balkan Countries

Year 2023, Volume: 6 Issue: 1, 58 - 74, 31.07.2023
https://doi.org/10.55065/intraders.1311816

Abstract

There is no doubt that financial intermediation plays a crucial role in the economy of both developed and developing countries. At the same time, the banking sector represents the leading financial intermediary through which developing countries can enhance or boost economic growth in their country. In addition, importance is given to the profitability and efficiency of the banking sector for fulfilling such macroeconomic objectives of the country.
In this regard, the main objective of this study is to analyze the efficiency of the banking sector of Western Balkans countries by utilizing secondary data collected from the official reports of the National Banks of the respective countries for the period 2004 – 2020. Thus, Data Envelopment Analysis was implemented to analyze the efficiency of the banks in Western Balkan for the period 2004 – 2020. Moreover, DEA results conclude that banks in Western Balkans operate at a good efficiency level due to an average score above 85% from 2004 – 2020. Montenegro had a continuous high-efficiency score during the last five years, followed by Serbia, Bosnia and Herzegovina, Kosovo, Albania, and North Macedonia.
Due to the results of the efficiency of the banking sector of the Western Balkans and the specific analysis of the Republic of North Macedonia case, specific policy recommendations are given in this regard to enhance the higher efficiency of the banks in the Republic of North Macedonia.

References

  • Aleskerov, F., Belousova, V., Ivashkovskaya, I., Pogorelskiy, K. & Stepanova, A. (2009) Cost Efficiency and Shareholders’ Voting Power in Russian Banking. Voting Power in Practice Workshop at the University of Warwick.
  • Asmild, M., Paradi, J. C., Aggarwall, V., & Schaffnit, C. (2004). Combining DEA Window Analysis with the Malmquist Index Approach in a Study of the Canadian Banking Industry. Journal Of Productivity Analysis, 21(1), 67-89.
  • Banker, R. D. (1984). Some models for estimating technical and scale inefficiencies in data envelopment analysis. Management Science, 30, 1078-1092.
  • Berger, A.N. & Humphrey, D.B. (1997) Efficiency of Financial Institutions: International Survey and Directions for Future Research. European Journal of Operational Research, 98.
  • Bougnol, M. L., Dulá, J.H., Retzlaff-Roberts, D. & Womer, N.K. (2005) Nonparametric frontier analysis with multiple constituencies, Journal of the Operational Research Society, 56:3, 252-266, DOI: 10.1057/palgrave.jors.2601816.
  • Cava, P.B., Salgado Junior, Alexandre Pereira, & Branco, Adriel Martins de Freitas. (2016). Evaluation of bank efficiency in brazil: a DEA approach. RAM. Revista de Administração Mackenzie, 17(4), 62-84. https://dx.doi.org/10.1590/1678-69712016/administracao.v17n4p61-83
  • CBR (2018). Review of the banking sector of the Russian Federation. Moscow: Central Bank of Russia. Retrieved from http://www.cbr.ru/eng/analytics/bank_system/obs_eng_186.pdf
  • Charnes, A., Cooper, W.W. & Rhodes, E. (1978) Measuring the efficiency of decision making units. European Journal of Operational Research, 2.
  • Coelli, T.J., Rao, D.S.P., O’Donnell, C.J., Battese, G.E. (2005). An Introduction to Efficiency and Productivity Analysis. Berlin: Springer.
  • Cooper, W.W., Lovell, C.A.K. (2000) New approaches to measures of efficiency in DEA: An introduction.  Journal of Productivity Analysis; Norwell, 13(2).
  • Farrell, M.J. (1957). "The measurement of productive efficiency," Journal of the Royal Statistical Society, 120(3), 253–290. Firdaus, M. F., & Hosen, M. N. (2013). Measurement of Efficiency and Soundness of Islamic Bank Using Two-Stage Data Envelopment Analysis and Modified Camels. Journal Of Islamic Banking & Finance, 30(3), 34-50.
  • Gaganis, C., & Pasiouras, F. (2009). Efficiency in the Greek Banking Industry: A Comparison of Foreign and Domestic Banks. International Journal Of The Economics Of Business, 16(2), 221–237. doi:10.1080/13571510902917533
  • Golovan, S. V. (2006). Factors Influencing the Efficiency of the Russian Bank's Performance. Applied Econometrics. Retrieved from http://pe.cemi.rssi.ru/pe_2006_02_03-17.pdf
  • Green, W. (1997). Frontier Production Functions. In: MH Pesaran & P.Shmidt (Eds.), Handbook of Applied Econometrics, Vol. II: Microeconometrics. Oxford: Blackwell Publishers.
  • Henni, A., & Chachoua, F. (2016). Foreign Banks Efficiency in Algeria: An Application of a non-parametric method. REMAH Journal, (17), 185-200.
  • Hosen, M. N. & Muhari, S. (2014) Analysis Of The Efficiency Levels Of The Sharia Rural Banks In Indonesia Using The Method Of Data Envelopment Analysis (DEA) and ITS Correlation With Camel. Journal Of Islamic Banking & Finance, 31(4), 82-104.
  • Knežević, S., Rakočević, S. & Đurić, D. (2011) Management Accounting in Achieving Competitive Advantage and Bank Controlling. Management (1820-0222) . 2011, Vol. 16 Issue 59, p5-13.
  • Koopmans, T.C. (1951). An Analysis of Production as an Efficient Combination of Activities. T. C. Koopmans, ed. 1971. Activity analysis of Production and Allocation, 7th ed. Yale University Press, New Haven, CT.
  • Kutlar, A., Kabasakal, A., & Babacan, A. (2015). Dynamic Efficiency of Turkish Banks: a DEA Window and Malmquist Index Analysis for 2003-2012. Sosyoekonomi, 23(2), 71-97. doi:10.17233/se.09289
  • Marković, M., Knežević, S., Brown, A. & Dmitrović, V. (2015) Measuring the Productivity of Serbian Banks Using Malmquist Index. Management (1820-0222), (76), 1-10. doi: 10.7595/management.fon.2015.0022
  • Mostafa, M. M. (2009) Modeling the efficiency of top Arab banks: A DEA–neural network approach. Expert Systems With Applications, 36(1), 309-320. doi: 10.1016/j.eswa.2007.09.001
  • Mustafa, S., & Mehmood, B. (2015). Efficiency Change in Pakistan Commercial Banking Sector: A Pre and Post Digital-Restructuring Analysis. Journal Of Emerging Economies & Islamic Research, 3(1), 1-12.
  • Ramakrishna, G., Ramulu, M. & Kumar, B. P. (2016) Financial Crisis and the Performance of Commercial Banks: Indian Experience. Journal of International Economics, 7(2), 35.
  • Resti, A. (1997) Evaluating the Cost-efficiency of the Italian Banking System: What Can Be Learned from the Joint Application of Parametric and Non-parametric Techniques. Journal of Banking and Finance, 21(2), 221–250.
  • Sanjeev, G. M. (2006). Data envelopment analysis (DEA) for measuring the technical efficiency of banks. Vision (09722629), 10(1), 13–27.
  • Shyu, J., Lieu, P., & Chang, W. (2015). How the environment determines banking efficiency: a comparison of banking firms in Taiwan, Hong Kong, and Mainland China. International Transactions In Operational Research, 22(4), 757-770. doi:10.1111/itor.12097
  • Soba, M., Erem, I., & Ceylan, F. (2016). The impact of corporate governance practices on bank efficiency: a case of turkey. Journal Of Suleyman Demirel University Institute Of Social Sciences, 25(3), 305-322.
  • Sufian, F., & Majid, M. A. (2007). Singapore banking efficiency and its relation to stock returns: a dea window analysis approach. International Journal Of Business Studies, 15(1), 83-106.
  • Tran Thi Thu, H., & Bhaiyat, F. (2016). Evaluating the efficiency of Vietnamese commercial banks using data envelopment analysis. Annual International Conference On Accounting & Finance, 48-57. doi:10.5176/2251-1997_AF16.20
  • Vishnyakov, I.V. (2001) A system of methods for assessing commercial banks on the basis of mandatory standards of the Central Bank of the Russian Federation. Economic Science of Modern Russia, 2(1), 57-73.
  • Wanke, P., Azad, M. K., & Barros, C. (2016). Efficiency factors in OECD banks: A ten-year analysis. Expert Systems With Applications, 64208–227. doi:10.1016/j.eswa.2016.07.020
  • Yang, Z. (2009) Bank Branch Operating Efficiency: A DEA Approach. Proceedings of the International MultiConference of Engineers and Computer Scientists 2009 Vol II. IMECS 2009, Hong Kong.
There are 32 citations in total.

Details

Primary Language English
Subjects Banking Management
Journal Section Articles
Authors

Berkan İmeri 0000-0002-3760-6706

Early Pub Date July 31, 2023
Publication Date July 31, 2023
Submission Date June 8, 2023
Acceptance Date July 29, 2023
Published in Issue Year 2023 Volume: 6 Issue: 1

Cite

APA İmeri, B. (2023). Empirical Analysis Of The Efficiency Of The Banking Sector In Western Balkan Countries. InTraders International Trade Academic Journal, 6(1), 58-74. https://doi.org/10.55065/intraders.1311816