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Banking efficiency in Egypt: an application of data envelopment

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  • Ammar Jreisat
  • Hassan Hassan

Abstract

The objective of this study is to investigate the efficiency of Egyptian banking. Employing data envelopment analysis (DEA), this study is the first to measure the efficiency of banks in Egypt. We compare the efficiency of large, medium and small banks and the efficiency of foreign and domestic banks using a balanced panel which cover 14 banks operating in Egypt from 1997 to 2013. For a comprehensive analysis, technical efficiency is decomposed into pure technical efficiency and scale efficiency. In all panel data models, we find that medium banks are the best performers while large sized banks are the least efficient compared with other categories. The results show that foreign banks have revealed better performance than domestic banks operating in Egypt.

Suggested Citation

  • Ammar Jreisat & Hassan Hassan, 2016. "Banking efficiency in Egypt: an application of data envelopment," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 11(2), pages 101-119.
    • Handle: RePEc:ids:ijecbr:v:11:y:2016:i:2:p:101-119
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    References listed on IDEAS

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    1. Anton Dobronogov & Farrukh Iqbal, 2007. "Economic Growth in Egypt: Constraints and Determinants," Journal of African Development, African Finance and Economic Association (AFEA), vol. 9(1), pages 31-66.
    2. Taqi N. Al-Faraj & Khaled A. Bu-Bshait & Wasel A. Al-Muhammad, 2006. "Evaluating the efficiency of Saudi commercial banks using data development analysis," International Journal of Financial Services Management, Inderscience Enterprises Ltd, vol. 1(4), pages 466-477.
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    4. Mahmoud Mohieldin & Sahar Nasr, 2003. "Bank Privatization in Egypt," Working Papers 0325, Economic Research Forum, revised Sep 2003.
    5. Ahmed Mohamed Badreldin & Christian Kalhoefer, 2009. "The Effect of Mergers and Acquisitions on Bank Performance in Egypt," Working Papers 18, The German University in Cairo, Faculty of Management Technology.
    6. R J Colwell & E P Davis, 1992. "Output, Productivity and Externalities - the Case of Banking," Bank of England working papers 3, Bank of England.
    7. Malak Reda, 2013. "The Effect of Mergers and Acquisitions on Bank Efficiency: Evidence from Bank Consolidation in Egypt," Working Papers 770, Economic Research Forum, revised Sep 2013.
    8. Timothy J. Coelli & D.S. Prasada Rao & Christopher J. O’Donnell & George E. Battese, 2005. "An Introduction to Efficiency and Productivity Analysis," Springer Books, Springer, edition 0, number 978-0-387-25895-9, June.
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    1. Nidhi Agarwala & Sudarshan Maity & Tarak Nath Sahu, 2024. "Efficiency of Indian banks in fostering financial inclusion: an emerging economy perspective," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 29(2), pages 341-353, June.

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