Data Envelopment Analysis: A Tool of Measuring Efficiency in Banking Sector

Filzah Mohamed Othman, Nor Aiza Mohd-Zamil, Siti Zaleha Abdul Rasid, Amin Vakilbashi and Mozhdeh Mokhber
Additional contact information
Filzah Mohamed Othman: International Business School, Universiti Teknologi Malaysia, Kuala Lumpur, Malaysia,
Nor Aiza Mohd-Zamil: International Business School, Universiti Teknologi Malaysia, Kuala Lumpur, Malaysia
Siti Zaleha Abdul Rasid: International Business School, Universiti Teknologi Malaysia, Kuala Lumpur, Malaysia,
Amin Vakilbashi: International Business School, Universiti Teknologi Malaysia, Kuala Lumpur, Malaysia,
Mozhdeh Mokhber: International Business School, Universiti Teknologi Malaysia, Kuala Lumpur, Malaysia,

International Journal of Economics and Financial Issues, 2016, vol. 6, issue 3, 911-916

Abstract: The present paper examined the review of literature related to measuring relative efficiency of banks using data envelopment analysis (DEA). The efficiency of banks is measure through the ability of the individual bank to maximise output given a certain level of input. By measuring its efficiency, it can serves as early warning or benchmark of its performance and it can define future improvement in various area such as managerial, technology or socio-economic. DEA is comprises of two basic model that are DEA Charnes-Cooper-Rhodes model with constant return to scale assumption and DEA Banker-Charnes-Cooper model with variable return to scale assumption. In banking industry, DEA is using two approaches that are production or intermediation approach. The former highlights banks as delivering services in the form of transaction and the later assumes banks intermediate funds between surplus units to deficit unit. The study of efficiency in banks with similar economic and political condition is important as banks operate in parallel.

Keywords: Data Envelopment Analysis; Efficiency; Banking (search for similar items in EconPapers)
JEL-codes: G2 M2 M4 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.econjournals.com/index.php/ijefi/article/download/2246/pdf (application/pdf)
http://www.econjournals.com/index.php/ijefi/article/view/2246/pdf (text/html)

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:eco:journ1:2016-03-12

Access Statistics for this article

International Journal of Economics and Financial Issues is currently edited by Ilhan Ozturk

More articles in International Journal of Economics and Financial Issues from Econjournals
Bibliographic data for series maintained by Ilhan Ozturk ().