IDEAS home Printed from https://ideas.repec.org/a/taf/apeclt/v15y2007i3p207-211.html
   My bibliography  Save this article

Turkish banking efficiency and its relation to stock performance

Author

Listed:
  • Cumhur Erdem
  • Meziyet Sema Erdem

Abstract

In this study, technical, allocative and economic efficiency scores of the banks whose stocks traded in Istanbul Stock Exchange are measured using data envelopment analysis (DEA) for the time period 1998 to 2004. Economic efficiency scores of banks obtained from DEA model was related to their stock prices to determine whether there is an explanatory power of efficiency scores on stock price returns. The average banks' efficiency decreased from 0.781 in 1999 to 0.504 in 2001 and started to increase after this year except the year of 2003 indicating that financial crises affected the efficiency scores of the banks. During the time period 1998 to 2004, six banks appeared to be technically efficient at least once.

Suggested Citation

  • Cumhur Erdem & Meziyet Sema Erdem, 2007. "Turkish banking efficiency and its relation to stock performance," Applied Economics Letters, Taylor & Francis Journals, vol. 15(3), pages 207-211.
    • Handle: RePEc:taf:apeclt:v:15:y:2007:i:3:p:207-211
    DOI: 10.1080/13504850600706925
    as

    Download full text from publisher

    File URL: http://www.informaworld.com/openurl?genre=article&doi=10.1080/13504850600706925&magic=repec&7C&7C8674ECAB8BB840C6AD35DC6213A474B5
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/13504850600706925?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    2. Altunbas, Yener & Evans, Lynne & Molyneux, Philip, 2001. "Bank Ownership and Efficiency," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 33(4), pages 926-954, November.
    3. Osman Zaim, 1995. "The Effect of Financial Liberalizationon the Efficiency of Turkish Commercial Banks," Working Papers 9505, Department of Economics, Bilkent University.
    4. Oral, Muhittin & Yolalan, Reha, 1990. "An empirical study on measuring operating efficiency and profitability of bank branches," European Journal of Operational Research, Elsevier, vol. 46(3), pages 282-294, June.
    5. Aykut Kibritcioglu, 2005. "Banking Sector Crises and Related New Regulations in Turkey," Macroeconomics 0505006, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ihsan Isik & M. Kabir Hassan, 2003. "Efficiency, Ownership and Market Structure, Corporate Control and Governance in the Turkish Banking Industry," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 30(9‐10), pages 1363-1421, December.
    2. Hakan Güneş & Dilem Yıldırım, 2016. "Estimating Cost Efficiency of Turkish Commercial Banks under Unobserved Heterogeneity with Stochastic Frontier Models," ERC Working Papers 1603, ERC - Economic Research Center, Middle East Technical University, revised Mar 2016.
    3. E. Nur Ozkan‐Gunay & Arzu Tektas, 2006. "Efficiency Analysis Of The Turkish Banking Sector In Precrisis And Crisis Period: A Dea Approach," Contemporary Economic Policy, Western Economic Association International, vol. 24(3), pages 418-431, July.
    4. Hsiang-Hsi Liu & Tser-Yieth Chen & Jia-Wen Chen, 2013. "Incorporating the Credit Ranking Measure to Evaluate the Operating Efficiency of Financial Holding Companies in Taiwan," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 3(10), pages 1386-1404, October.
    5. Sameh Charfeddine Karray & Jamel eddine Chichti, 2013. "Bank Size and Efficiency in Developing Countries: Intermediation Approach versus Value Added Approach and Impact of Non-Traditional Activities," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 3(5), pages 593-613, May.
    6. Soteriou, Andreas C. & Zenios, Stavros A., 1999. "Using data envelopment analysis for costing bank products," European Journal of Operational Research, Elsevier, vol. 114(2), pages 234-248, April.
    7. Fadzlan Sufian & Fakarudin Kamarudin, 2014. "The impact of ownership structure on bank productivity and efficiency: Evidence from semi-parametric Malmquist Productivity Index," Cogent Economics & Finance, Taylor & Francis Journals, vol. 2(1), pages 1-27, December.
    8. Demirbag, Mehmet & McGuinness, Martina & Akin, Ahmet & Bayyurt, Nizamettin & Basti, Eyup, 2016. "The professional service firm (PSF) in a globalised economy: A study of the efficiency of securities firms in an emerging market," International Business Review, Elsevier, vol. 25(5), pages 1089-1102.
    9. Victoria Vicario-Modroño & Rosa Gallardo-Cobos & Pedro Sánchez-Zamora, 2023. "Sustainability evaluation of olive oil mills in Andalusia (Spain): a study based on composite indicators," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(7), pages 6363-6392, July.
    10. Qian Wang & Xiaochu Feng, 2014. "Does Property Rights Reform Improve the Efficiency of China's State-owned Banks?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 22(4), pages 1-20, July.
    11. Hokey Min & Hyesung Min & Seong Jong Joo, 2007. "A data envelopment analysis on assessing the competitiveness of Korean hotels," The Service Industries Journal, Taylor & Francis Journals, vol. 29(3), pages 367-385, November.
    12. Gattoufi, Said & Oral, Muhittin & Reisman, Arnold, 2004. "A taxonomy for data envelopment analysis," Socio-Economic Planning Sciences, Elsevier, vol. 38(2-3), pages 141-158.
    13. Baharin, Roziana & isa, zaidi, 2018. "Box Cox- Fourier Flexible Functional Forms in Stochastic Metafrontier Analysis: The Cost Efficiency of the Insurance Industry in Malaysia," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 52(1), pages 135-144.
    14. Adnan Kasman, 2002. "Cost Efficiency, Scale Economies, and Technological Progress in Turkish Banking," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 2(1), pages 1-20.
    15. Paradi, Joseph C. & Rouatt, Stephen & Zhu, Haiyan, 2011. "Two-stage evaluation of bank branch efficiency using data envelopment analysis," Omega, Elsevier, vol. 39(1), pages 99-109, January.
    16. Cook, Wade D. & Doyle, John & Green, Rodney & Kress, Moshe, 1997. "Multiple criteria modelling and ordinal data: Evaluation in terms of subsets of criteria," European Journal of Operational Research, Elsevier, vol. 98(3), pages 602-609, May.
    17. Walczuch, R.M. & Bielowski, A.G., 2002. "From measurement to management: the influence of IT on service operations," Research Memorandum 045, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    18. Ioannis E. Tsolas, 2020. "Financial Performance Assessment of Construction Firms by Means of RAM-Based Composite Indicators," Mathematics, MDPI, vol. 8(8), pages 1-16, August.
    19. El-Mahgary, Sami & Lahdelma, Risto, 1995. "Data envelopment analysis: Visualizing the results," European Journal of Operational Research, Elsevier, vol. 83(3), pages 700-710, June.
    20. Giokas, Dimitris I., 2008. "Assessing the efficiency in operations of a large Greek bank branch network adopting different economic behaviors," Economic Modelling, Elsevier, vol. 25(3), pages 559-574, May.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:apeclt:v:15:y:2007:i:3:p:207-211. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEL20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.