Two-stage evaluation of bank branch efficiency using data envelopment analysis

Omega

Volumn 39, Issue 1, 2011, Pages 99-109

  Paradi, Joseph C ^a   Rouatt, Stephen ^b   Zhu, Haiyan ^a  

^a UNIVERSITY OF TORONTO   (Canada)

^b MCKINSEY AND COMPANY   (United States)

Author keywords

Bank branch network; DEA; Efficiency; Multi dimensional measurements; Two stage evaluation process

Indexed keywords

EID: 77953686689     PISSN: 03050483     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.omega.2010.04.002     Document Type: Article

References (71)

1. NFO CFgroup Poll. Tellers still popular, study finds. The Globe and Mail; 2003, January: B5.
2. Schweser C., Temte A. Schweser's study notes: financial statement analysis 2002, Vol. 3. Kaplan Professional Company.
3. The Economist Newspaper Ltd Guide to economic indicators 1997, John Wiley & Sons Inc., United Kingdom.
4. Coelli T.J., Prasada Rao D.S., O'Donnell C.J., Battese G.E. An introduction to efficiency and productivity analysis 1998, Kluwer Academic Publishers, Boston.
5. Murphy N.B., Orgler Y.E. Cost analysis for branching systems: methodology, test results, and implications for management. Journal of Financial Research 1982, 5:181-188.
6. Berger A.N., Hancock D., Humphrey D.B. Bank efficiency derived from the profit function. Journal of Banking and Finance 1993, 17:317-347.
7. Hensel N.D. Strategic management of efficiencies in networks: cross-country evidence on European branch banking. European Financial Management 2003, 9:333-360.
8. Bauer P.W., Berger A.N., Ferrier G.D., Humphrey D.B. Consistency conditions for regulatory analysis of financial institutions: a comparison of frontier efficiency methods. Journal of Economics and Business 1998, 50:85-114.
9. Berger A.N., Humphrey D.B. Efficiency of financial institutions: international survey and directions for future research. European Journal of Operational Research 1997, 98:175-212.
10. Schmidt P. Frontier production functions. Econometric Reviews 1985, 4:289-328.
11. Kumbhakar S.C., Lovell C.A.K. Stochastic frontier analysis 2000, Cambridge University Press, Cambridge.
12. Tsionas E.G. Full likelihood inference in normal-gamma stochastic frontier models. Journal of Productivity Analysis 1999, 13:179-201.
13. Tsionas E.G. Combining DEA and stochastic frontier models: an empirical bayes approach. European Journal of Operational Research 2003, 147:499-510.
14. Ruggiero J. Efficiency estimation and error decomposition in the stochastic frontier model: a Monte Carlo analysis. European Journal of Operational Research 1999, 115:555-563.
15. Ondrich J., Ruggiero J. Efficiency measurement in the stochastic frontier model. European Journal of Operational Research 2001, 129:434-442.
16. Jensen U. Misspecification preferred: the sensitivity of inefficiency rankings. Journal of Productivity Analysis 2005, 23:223-244.
17. Ruggiero J. A comparison of DEA and the stochastic frontier model using panel data. International Transactions in Operational Research 2007, 14:259-266.
18. Førsund F.R., Sarafoglou N. On the origins of data envelopment analysis. Journal of Productivity Analysis 2002, 17:23-40.
19. Charnes A., Cooper W.W., Rhodes E.L. Measuring the efficiency of decision making units. European Journal of Operational Research 1978, 2:429-444.
20. Farrell M.J. The measurement of productive efficiency. Journal of the Royal Statistical Society 1957, 120:253-290.
21. Banker R.D., Charnes A., Cooper W.W. Some models for estimating technical and scale inefficiencies in data envelopment analysis. Management Science 1984, 30:1078-1092.
22. Färe R., Grosskopf S. Intertemporal production frontiers: with dynamic DEA 1996, Kluwer, Norwell.
23. Tone K., Tsutsui M. Dynamic DEA: A slacks-based measure approach. Omega 2010, 38:145-156.
24. Cooper W.W., Seiford L.M., Tone K. Data envelopment analysis: a comprehensive text with models, applications, references, and DEA-solver software 2007, Springer, New York.
25. Cook W.D., Hababou M. Sales performance measurement in bank branches. Omega 2001, 29:299-307.
26. Alirezaee M.R., Afsharian M. A complete ranking of DMUs using restrictions in DEA models. Applied Mathematics and Computation 2007, 189:1550-1559.
27. Zhu J. Quantitative models for performance evaluation and benchmarking: data envelopment analysis with spreadsheets and DEA excel solver 2003, Kluwer Academic Publishers, Boston.
28. Avkiran N.K. Removing the impact of environment with units-invariant efficient frontier analysis: an illustrative case study with intertemporal panel data. Omega 2009, 37:535-544.
29. Casu B., Girardone C. Integration and efficiency convergence in EU banking markets. Omega 2010, 38:260-267.
30. Lozano-Vivas A., Pastor J.T. Do performance and environmental conditions act as barriers for cross-border banking in Europe?. Omega 2010, 38:275-282.
31. Siriopoulos C., Tziogkidis P. How do Greek banking institutions react after significant events?-A DEA approach. Omega 2010, 38:294-308.
32. Tsionas E.G., Papadakis E.N. A Bayesian approach to statistical inference in stochastic DEA. Omega 2010, 38:309-314.
33. Fukuyama H., Weber W.L. A slacks-based inefficiency measure for a two-stage system with bad outputs. Omega 2010, 38:398-409.
34. Sherman H.D., Gold F. Bank branch operating efficiency: evaluation with data envelopment analysis. Journal of Banking and Finance 1985, 9:297-316.
35. Vassiloglou M., Giokas D. A study of the relative efficiency of bank branches: an application of data envelopment analysis. Journal of the Operational Research Society 1990, 41:591-597.
36. Oral M., Yolalan R. An empirical study on measuring operating efficiency and profitability of bank branches. European Journal of Operational Research 1990, 46:282-294.
37. Giokas D. Bank branch operating efficiency: a comparative application of DEA and the log-linear model. Omega 1991, 19:549-557.
38. Al-Faraj T.N., Alidi A.S., Bu-Bshait K.A. Evaluation of bank branches by means of data envelopment analysis. International Journal of Operations & Production Management 1993, 13:45-52.
39. Tulkens H. On FDH efficiency analysis: some methodological issues and applications to retail banking, courts and urban transit. Journal of Productivity Analysis 1993, 4:183-210.
40. Drake L., Howcroft B. Relative efficiency in the branch network of a UK Bank: an empirical study. Omega 1994, 22:83-91.
41. Drake L., Howcroft B. An insight into the size efficiency of a UK bank branch network. Managerial Finance 2002, 28:24-36.
42. Lovell C.A.K., Pastor J.T. Target setting: an application to a bank branch network. European Journal of Operational Research 1997, 98:290-299.
43. Golany B., Storbeck J.E. A data envelopment analysis of the operation efficiency of bank branches. Interfaces 1999, 29:14-26.
44. Kantor J., Maital S. Measuring efficiency by product group: integrating DEA with activity-based accounting in a Large Mideast Bank. Interfaces 1999, 29:27-36.
45. Porembski M. Visualizing efficiency and reference relations in data envelopment analysis with an application to the branches of a German bank. Journal of Productivity Analysis 2005, 23:203-221.
46. Camanho A.S., Dyson R.G. A generalisation of the Farrell cost efficiency measure applicable to non-fully competitive settings. Omega 2008, 36:147-162.
47. Portela M.C.A.S., Thanassoulis E. Comparative efficiency analysis of Portuguese bank Branches. European Journal of Operational Research 2007, 177:1275-1288.
48. Das A., Ray S.C., Nag A. Labor-use efficiency in Indian banking: a branch-level analysis. Omega 2009, 37:411-425.
49. Avkiran N.K. Opening the black box of efficiency analysis: an illustration with UAE banks. Omega 2009, 37:930-941.
50. Parkan C. Measuring the efficiency of service operations: an application to bank branches. Engineering Costs and Production Economics 1987, 12:237-242.
51. Schaffnit C., Rosen D., Paradi J.C. Best practice analysis of bank branches: an application of DEA in a Large Canadian Bank. European Journal of Operational Research 1997, 98:269-289.
52. Cook W.D., Hababou M., Tuenter H.J. Multicomponent efficiency measurement and shared inputs in data envelopment analysis: an application to sales and service performance in bank branches. Journal of Productivity Analysis 2000, 14:209-224.
53. Bala K., Cook W.D. Performance measurement with classification information: an enhanced additive DEA model. Omega 2003, 31:439-450.
54. Cook W.D., Seiford L.M., Zhu J. Models for performance benchmarking: measuring the effect of e-business activities on banking performance. Omega 2004, 32:313-322.
55. Wu D., Yang Z., Liang L. Efficiency analysis of cross-region bank branches using fuzzy data envelopment analysis. Applied Mathematics and Computation 2006, 181:271-281.
56. Wade D. Building performance standards into data envelopment analysis structures. IIE Transactions 2005, 37:267-275.
57. Cook W.D., Zhu J. Incorporating multiprocess performance standards into the DEA framework. Operations Research 2006, 54:656-665.
58. Paradi J.C., Schaffnit C. Commercial branch performance evaluation and results communication in a Canadian bank-a DEA application. European Journal of Operational Research 2004, 156:719-735.
59. Yang Z, Paradi JC. Cross firm Bank Branch Benchmarking Using "Handicapped" Data Envelopment Analysis to Adjust for Corporate Strategic Effects. In: Proceedings of the 39th Hawaii International Conference on System Sciences; 2006, p. 1-10.
60. McEachern D., Paradi J.C. Intra- and inter-country bank branch performance assessment using DEA. Journal of Productivity Analysis 2007, 27:123-136.
61. Athanassopoulos A.D. Service quality and operating efficiency synergies for management control in the provision of financial services: evidence from Greek bank branches. European Journal of Operational Research 1997, 98:300-313.
62. Giokas D.I. Assessing the efficiency in operations of a large Greek bank branch network adopting different economic behaviors. Economic Modeling 2008, 25:559-574.
63. Kinsella R.P. The measurement of bank output. Journal of the Institute of Bankers in Ireland 1980, 82:173-183.
64. Manandhar R., Tang J.C.S. The evaluation of bank branch performance using data envelopment analysis a framework. Journal of High Technology Management Research 2002, 13:1-17.
65. Berger AN, DeYoung R. Problem Loans and Cost Efficiency in Commercial Banks. Working Paper, Wharton Financial Institutions Paper; 1996, p. 96-01.
66. Fixler D., Zieschang K. The productivity of the banking sector: integrating financial and production approaches to measuring financial service output. Canadian Journal of Economics 1999, 32:547-569.
67. Colwell R.J., Davis E.P. Output and productivity in banking. Scandinavian Journal of Economics 1992, 94:s111-s129.
68. Berger A.N., Leusner J.M., Mingo J.J. The efficiency of bank branches. Journal of Monetary Economics 1997, 40:141-162.
69. Baxter D, Ramlo A. From Better to Worse: The Recent History of Personal Savings in British Columbia. The Urban Futures Institute Report; 2002, Issue 56.
70. CIBC World Markets. The Bankruptcy Report-June 2002. CIBC World Markets Corporation; 2002.
71. Frei F.X., Harker P.T., Hunter L.W. Inside the black box: what makes a bank efficient. Performance of Financial Institutions 2000, 259-311. Cambridge University Press, England. P.T. Harker, S.A. Zenios (Eds.).