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Measuring Efficiency and Total Factor Productivity using Data Envelopment Analysis: An Empirical Study from Banks of Turkey

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  • Serpil Kilic Depren

    (Department of Statistics, Faculty of Arts and Science, Y ld z Technical University, Davutpa a Campus, 34220, Esenler, stanbul, Turkey)

  • Ozer Depren

    (Department of Quality, Yapi Kredi Bank, B y kdere Caddesi, Yap Kredi Plaza D Blok, Levent, stanbul, Turkey)

Abstract

The main purpose of this study is to assess the performance of deposit banks operating in the Turkish Banking Sector for the years 2014-2015 using Data Envelopment Analysis (DEA) and malmquist productivity index (MPI) methodologies. In the light of this aim, 21 deposit banks' data obtained from The Banks Association of Turkey between 2014 and 2015 is used. There are 2 inputs and 2 outputs variables for Production Approach and 3 inputs and 3 outputs variables for Intermediation Approaches. To measure productivity changes over time, MPI index is calculated from DEA scores. Thus, the influencing factors of relative efficiency and the efficient (or inefficient) banks are determined. As a result, average # of Staff per Branch, total personal expenses/total assets and total deposits/total assets have important role for efficiency in production approach. In intermediation approach, non-interest expenditure/total assets, total loans/total assets and non-interest income/total assets are associated with the efficiency

Suggested Citation

  • Serpil Kilic Depren & Ozer Depren, 2016. "Measuring Efficiency and Total Factor Productivity using Data Envelopment Analysis: An Empirical Study from Banks of Turkey," International Journal of Economics and Financial Issues, Econjournals, vol. 6(2), pages 711-717.
    • Handle: RePEc:eco:journ1:2016-02-47
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    References listed on IDEAS

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    1. Lema, Tadesse Zenebe, 2016. "Productivity change of Ethiopian banks: A malmquist productivity index approach," MPRA Paper 77969, University Library of Munich, Germany.
    2. Chan, Sok-Gee & Aktan, Bora & Burton, Bruce & Koh, Eric H.Y., 2021. "The impact of soft information and institutional quality on foreign bank efficiency – Evidence from ASEAN-5 countries," International Review of Economics & Finance, Elsevier, vol. 74(C), pages 23-32.

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    More about this item

    Keywords

    Data Envelopment Analysis; Turkish Banking Sector; Malmquist Productivity Index;
    All these keywords.

    JEL classification:

    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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