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Impact Of Financial Crisis On Banking Efficiency: Evidence From Romania

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  • Mihăiță-Cosmin M. POPOVICI

    (Doctoral School of Economics and Business Administration, ALEXANDRU IOAN CUZA University of Iași, Romania)

Abstract

In this paper, we use a non-parametric approach to examine the efficiency of banks from Romania in the face of global financial crisis, during a ten year period, from 2002 to 2012. We limit our sample to this period in order to observe the dynamics of efficiency before and after the financial crisis. We develop a empirical model that involves estimating bank efficiency. In order to measure the efficiency growth of the banking industry, we calculate Malmquist index using a non-parametric linear programming approach. Our results suggest that during the first period under study (2002-2007), the banks from Romania have been more efficient, mainly because of reforms for the integration in to European Union. In the second period (2007-2012), financial crisis took its toll on banking efficiency even though banks have attempted to reduce personnel costs.

Suggested Citation

  • Mihăiță-Cosmin M. POPOVICI, 2014. "Impact Of Financial Crisis On Banking Efficiency: Evidence From Romania," SEA - Practical Application of Science, Romanian Foundation for Business Intelligence, Editorial Department, issue 3, pages 451-456, April.
    • Handle: RePEc:cmj:seapas:y:2014:i:3:p:451-456
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    References listed on IDEAS

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    Cited by:

    1. Kenan Oğuzhan Oruç & Fatma Gül Altın, 2015. "The Effect of the 2007 Financial Crisis on the Information Technologies Sector: Application of Malmquist Productivity Index Method," International Journal of Business and Social Research, LAR Center Press, vol. 5(6), pages 1-11, June.
    2. Clements Adeyinka Akinsoyinu, 2015. "Efficiency Evaluation of European Financial Cooperative Sector. A Data Envelopment Analysis Approach," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 5(4), pages 11-21, October.
    3. Kenan Oğuzhan Oruç & Fatma Gül Altın, 2015. "The Effect of the 2007 Financial Crisis on the Information Technologies Sector: Application of Malmquist Productivity Index Method," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 5(6), pages 1-11, June.

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    More about this item

    Keywords

    Bank; Efficiency; Romania; Malmquist index;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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