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Efficiency of Banks in Croatia: A DEA Approach

Author

Listed:
  • Igor Jemrić

    (The Croatian National Bank, Croatia)

  • Boris Vujčić

    (The Croatian National Bank, Croatia)

Abstract

An understanding of a bank’s relative efficiency is important for analysts, practitioners and policymakers alike. In this paper, we analyze bank efficiency in Croatia between 1995 and 2000, using Data Envelopment Analysis. We find that foreign-owned banks are on average most efficient, that the new banks are more efficient than the old ones, and that smaller banks are globally efficient but large banks appear to be efficient when we allow for variable returns to scale. We also find that there has been strong equalization in terms of average efficiency in the Croatian banking market, both between and within the peer groups of banks.

Suggested Citation

  • Igor Jemrić & Boris Vujčić, 2002. "Efficiency of Banks in Croatia: A DEA Approach," Working Papers 7, The Croatian National Bank, Croatia.
    • Handle: RePEc:hnb:wpaper:7
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    envelopment analysis; efficiency frontier; operating approach; intermediation approach; Croatia; banks;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics

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