IMPACT OF FINANCIAL CRISIS ON BANKING EFFICIENCY: EVIDENCE FROM ROMANIA

Mihăiță-Cosmin M. Popovici
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Mihăiță-Cosmin M. Popovici: Doctoral School of Economics and Business Administration, ALEXANDRU IOAN CUZA University of Iași, Romania

SEA - Practical Application of Science, 2014, issue 3, 451-456

Abstract: In this paper, we use a non-parametric approach to examine the efficiency of banks from Romania in the face of global financial crisis, during a ten year period, from 2002 to 2012. We limit our sample to this period in order to observe the dynamics of efficiency before and after the financial crisis. We develop a empirical model that involves estimating bank efficiency. In order to measure the efficiency growth of the banking industry, we calculate Malmquist index using a non-parametric linear programming approach. Our results suggest that during the first period under study (2002-2007), the banks from Romania have been more efficient, mainly because of reforms for the integration in to European Union. In the second period (2007-2012), financial crisis took its toll on banking efficiency even though banks have attempted to reduce personnel costs.

Keywords: Bank; Efficiency; Romania; Malmquist index (search for similar items in EconPapers)
JEL-codes: C14 F65 G21 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:cmj:seapas:y:2014:i:3:p:451-456

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