XXVI Edition

14-15-16 December 2017"

Measurement of Banking Efficiency using Dynamic Data Envelopment Analysis Model: Evidence of ten Central and Eastern Europe Countries

Palečková Iveta, Silesian University, School of Business Administration

The aim of the paper is to estimate the banking efficiency of ten Central and Eastern Europe Counties using the Dynamic Data Envelopment Analysis. In accordance with the aim of the paper we determine whether banks that belong to financial conglomerates are more or less efficient than other banks in the banking industry. The observed Central and Eastern Europe countries include Bosnia and Herzegovina, Bulgaria, Croatia, Czechia, Hungary, Poland, Romania, Serbia, Slovakia and Slovenia. First, we estimate the relative efficiency using the Dynamic Data Envelopment Analysis, the slack-based measure model with variable return to scale. Next, we analyse the individual banks of financial conglomerates. We investigate banks from four financial conglomerates (Erste Group, KBC Group, Société Générale Group and UniCredit Group). We analyse whether these banks achieve a value above or below the median value in each observed country. Results suggest that most banks were higher efficient than median value of technical efficiency in the banking industry, but there were the differences in banks in financial conglomerates across CEE countries.

Area: Efficiency and Productivity Analysis

Keywords: Banking sector; CEE countries; Dynamic DEA; financial conglomerate; intermediation approach

Paper file

University Network