Investigating the Performance of the Banking System in Iran: Multi-Frontier Malmquist-Luenberger Productivity Index Approach (in Persian)

Hamid Reza Faaljou () and Ali Kalantari ()
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Hamid Reza Faaljou: URMIA UNIVERSITY
Ali Kalantari: URMIA UNIVERSITY

Journal of Monetary and Banking Research (فصلنامه پژوهش‌های پولی-بانکی), 2019, vol. 12, issue 40, 299-342

Abstract: This paper examines the efficiency and productivity of the banking industry in Iran, consideringdifferent ownership system of banks and different definations of bankchr('39')s output and input. Moreover, in this study, the inclusion of undesirable outputs in the bankchr('39')s performance is evaluated. The Multi-Frontier Malmquist-Luenberger Productivity Index applied to examine the performance of the banking system in Iran. The results of the statistical tests showed that the inclusion of the undesirable output had a significant effect on the efficiency of the banking system. Therefore, the lack of attention to such risks and undesirable outputs leads to an inaccurate estimation of the performance of the banks. On the other hand, adopting different determinations of output and input in banking system, causing different results in the banking performance but considering two different banks ownership in Iran has no significant impact on banking performance. The average efficiency in public banks is more than private banks performance when we consider the model under intermediary and product approach of defining banks output and input. In the case of profit approach, the efficiency of private banks is more than that of public banks.

JEL-codes: C87 G21 G24 (search for similar items in EconPapers)
Date: 2019
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