Measuring bank efficiency: tradition or sophistication? - A note

Jenifer Daley and Kent Matthews

No E2009/24, Cardiff Economics Working Papers from Cardiff University, Cardiff Business School, Economics Section

Abstract: The recent literature on measuring bank performance indicates a preference for sophisticated techniques over simple accounting ratios. We explore the results and relationships between bank efficiency estimates using accounting ratios and Data Envelope Analysis (DEA) with bootstrap among Jamaican banks between 1998 and 2007. The results indicate different outcomes for the traditional accounting ratios and the sophisticated DEA methodology in the measurement of bank efficiency. GLS random effects two-variable regression tests for superiority using a risk index for insolvency suggest an advantage in favour of the DEA.

Keywords: Bank efficiency; Jamaica; Accounting Ratios (search for similar items in EconPapers)
JEL-codes: G21 G28 G29 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2009-11
New Economics Papers: this item is included in nep-acc, nep-ban and nep-eff
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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