Efficiency and Its Impact on the Performance of European Commercial Banks

Mohsen Afsharian, Anna Kryvko and Peter Reichling
Additional contact information
Mohsen Afsharian: Faculty of Economics and Management, Otto-von-Guericke University Magdeburg
Anna Kryvko: Faculty of Economics and Management, Otto-von-Guericke University Magdeburg
Peter Reichling: Faculty of Economics and Management, Otto-von-Guericke University Magdeburg

No 110018, FEMM Working Papers from Otto-von-Guericke University Magdeburg, Faculty of Economics and Management

Abstract: The paper empirically analyzes the impact of the degree of efficiency on key performance fig-ures of publicly traded European banks in the period from 2005 to 2009. Efficiency is meas-ured by constructing non-parametric frontiers using the technique of data envelopment analysis on the cost, revenue, and profit sides. Decomposition of overall efficiency provides a detailed insight into effective risk and performance drivers in the banking industry. The results of our paper suggest that an increase in pure technical efficiency is related to more volatile assets, which is reflected in lower market values. Allocative and scale efficiency, however, boost capi-tal market performance.

Keywords: Data Envelopment Analysis (DEA); Efficiency; European Banks; Bank Performance (search for similar items in EconPapers)
JEL-codes: C33 C61 D24 G21 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2011-08
New Economics Papers: this item is included in nep-ban, nep-cse, nep-eff and nep-eur
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.fww.ovgu.de/fww_media/femm/femm_2011/2011_18.pdf First version, 2011 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mag:wpaper:110018

Access Statistics for this paper

More papers in FEMM Working Papers from Otto-von-Guericke University Magdeburg, Faculty of Economics and Management Contact information at EDIRC.
Bibliographic data for series maintained by Guido Henkel ().