Investigating bank efficiency in transition economies: A window-based weight assurance region approach

Marta Degl’Innocenti (Lead / Corresponding author), Stavros Kourtzidis, Zeljko Sevic, Nickolaos Tzeremes

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    Abstract

    This paper examines the efficiency of 116 banks for nine new EU members in Central and Eastern European (CEE) countries over the period 2004–2015. We employ the weight assurance region (WAR) and we treat deposits as an intermediate variable in a two-stage data-envelopment analysis model. We then expand the WAR model by including a window-based approach to take into account the patterns of efficiency over time. The results indicate a low level of efficiency over the entire period of analysis, especially for Eastern European and Balkan countries rather than Central European countries. Overall, we find that inefficiency in CEE countries is mainly driven by the profitability stage rather than the value added activity stage.
    Original languageEnglish
    Pages (from-to)23-33
    Number of pages11
    JournalEconomic Modelling
    Volume67
    Early online date13 Sep 2016
    DOIs
    Publication statusPublished - Dec 2017

    Keywords

    • Banking
    • Efficiency
    • Transition economies
    • Data envelopment analysis
    • Two-stage
    • Window analysis

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