Turkish bank efficiency: Bayesian estimation with undesirable outputs

Journal of Banking and Finance

Volumn 37, Issue 2, 2013, Pages 506-517

  George Assaf, A ^a   Matousek, Roman ^b,c   Tsionas, Efthymios G ^d  

^a UNIVERSITY OF MASSACHUSETTS   (United States)

^b UNIVERSITY OF SUSSEX   (United Kingdom)

^c LONDON METROPOLITAN UNIVERSITY   (United Kingdom)

^d ATHENS UNIVERSITY OF ECONOMICS AND BUSINESS   (Greece)

Author keywords

Bank; Bayesian distance function; C11; D21; G21; G23; Non performing loans; Turkey

Indexed keywords

EID: 84869889324     PISSN: 03784266     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.jbankfin.2012.09.009     Document Type: Article

References (47)

1. Allen L., Saunders A. Bank window dressing: theory and evidence. Journal of Banking and Finance 1992, 16:585-623.
2. Altunbas Y., Lui M.H., Molynex P., Seth P. Efficiency and risk in Japanese banking. Journal of Banking and Finance 2000, 24:1605-1628.
3. Ariff M., Can L. IMF bank-restructuring efficiency outcomes: evidence from East Asia. Journal of Financial Services Research 2009, 35:167-187.
4. Arsoy A.P., Gucenme U. The development of inflation accounting in Turkey. Critical Perspectives on Accounting 2009, 20:568-590.
5. Assaf G.A., Barros C., Matousek R. Productivity growth and efficiency of Shinkin banks: evidence from bootstrap and Bayesian approaches. Journal of Banking and Finance 2011, 35:331-342.
6. Atkinson E., Dorfman J.H. Bayesian measurement of productivity and efficiency in the presence of undesirable outputs: crediting electric utilities for reducing air pollution. Journal of Econometrics 2005, 126:445-468.
7. Aysan A.F., Ceyhan S.P. Globalization of Turkey's banking sector: determinants of foreign bank penetration in Turkey. International Research Journal of Finance and Economics 2008, 15:90-102.
8. Barros P.C., Managi S., Matousek R. The technical efficiency of the Japanese banks: non-radial directional performance measurement with undesirable output. Omega. The International Journal of Management Science 2012, 40:1-8.
9. Battese G.E., Coelli T.J. A model for technical inefficiency effects in a stochastic frontier production for panel data. Empirical Economics 1995, 20:325-332.
10. Berg S.A., Forsund F.R., Jansen E.S. Malmquist indices of productivity growth during the deregulation of Norwegian banking, 1980-89. Scandinavian Journal of Economics 1992, 94:211-228.
11. Berger A.N. International comparisons of banking efficiency. Financial Markets, Institutions & Instruments 2007, 16:119-144.
12. Berger A.N., DeYoung R. Problem loans and cost efficiency in commercial banks. Journal of Banking and Finance 1997, 21:849-870.
13. 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.
14. Berger A.N., Mester L.J. Inside the black box: what explains differences in the efficiencies of financial institutions?. Journal of Banking and Finance 1997, 21:895-947.
15. Berger A.N., DeYoung R., Genay H., Udell G.F. Globalization of financial institutions: evidence from cross-border banking performance. Brookings-Wharton Papers on Financial Services 2000, 3:23-158.
16. Carbo S., Humphrey D.B., del Paso R.L. Do cross-country differences in bank efficiency support a policy of national champions?. Journal of Banking and Finance 2007, 31:2173-2188.
17. Chen S.-H., Liao C.-C. Are foreign banks more profitable than domestic banks? Home- and host-country effects of banking market structure, governance, and supervision. Journal of Banking and Finance 2011, 35:819-839.
18. Claessens, S., Horen, N.V., 2012. Foreign Banks: Trends, Impact and Financial Stability. Working Paper, International Monetary Fund.
19. Cornwell C., Schmidt R., Sickles R. Production frontiers with cross-sectional and time-series variations in efficiency levels. Journal of Econometrics 1990, 46:185-200.
20. Delis M.D., Tsionas E.G. The joint estimation of bank level market power and efficiency. Journal of Banking and Finance 2009, 33:1842-1850.
21. Demir N., Mahmud S.F., Babuscu S. The technical inefficiency effects of Turkish banks after financial liberalization. The Developing Economies 2005, 48:396-411.
22. Denizer C., Dinc M., Tarimcilar M. Financial liberalization and banking efficiency: evidence from Turkey. Journal of Productivity Analysis 2007, 27:177-195.
23. El-Gamal M., Inanoglu H. Inefficiency and heterogeneity in Turkish banking: 1990-2000. Journal of Applied Econometrics 2005, 20:641-664.
24. Ertugrul A., Zaim O. Economic crises and efficiency in Turkish banking industry. METU Studies in Development 1999, 26:99-116.
25. Evanoff D.D., Segal L.M. Strategic responses to bank regulation: evidence from HMDA data. Journal of Financial Services Research 1997, 11:69-93.
26. Färe R., Primont D. Multi-output production and duality: theory and applications 1995, Kluwer Academic Publishers, Boston.
27. Feng G., Serletis A. Efficiency, technical change, and returns to scale in large US banks: panel data evidence from an output distance function satisfying theoretical regularity. Journal of Banking and Finance 2009, 34:127-138.
28. Fernandez C., Koop G., Steel M. Multiple-output production with undesirable outputs: an application to nitrogen surplus in agriculture. Journal of the American Statistical Association 2002, 97:432-442.
29. Fries S., Taci A. Cost efficiency of banks in transition: evidence from 289 banks in 15 post-communist countries. Journal of Banking and Finance 2005, 29:55-81.
30. Fukuyama H., Matousek R. Efficiency of Turkish banking: two-stage system variable returns to scale model. Journal of International Financial Markets, Institutions and Money 2011, 21:71-91.
31. Fukuyama H., Weber W.L. Japanese banking inefficiency and shadow pricing. Mathematical and Computer Modelling 2008, 71:1854-1867.
32. Isik I., Hassan M.K. Technical, scale and allocative efficiencies of Turkish banking industry. Journal of Banking and Finance 2002, 26:719-766.
33. Isik I., Hassan M.K. Financial deregulation and total factor productivity change: an empirical study of Turkish commercial banks. Journal of Banking and Finance 2003, 27:1455-1485.
34. Kasman A. Cost efficiency, scale economies, and technological progress in Turkish banking. Central Bank Review 2002, 1:1-20.
35. Kauko K. Managers and efficiency in banking. Journal of Banking and Finance 2009, 33:546-556.
36. Kim J.Y. Limited information likelihood and Bayesian analysis. Journal of Econometrics 2002, 107:175-193.
37. Matousek R., Sarantis N. The bank lending channel and monetary transmission in Central and Eastern European countries. Journal of Comparative Economics 2009, 37:321-334.
38. Mercan M., Yolalan R. The effect of scale and mode of ownership on the Turkish banking sector financial performance. The ISE Review 2000, 4:2-23.
39. Mester L.J. A study of bank efficiency taking into account risk-preferences. Journal of Banking and Finance 1996, 20:1025-1045.
40. Ongena S., Sendeniz-Yüncü I. Which firms engage small, foreign, or state banks? And who goes Islamic? Evidence from Turkey. Journal of Banking and Finance 2011, 35:3213-3224.
41. Öniş Z. The effect of financial liberalization on the efficiency of Turkish commercial banks. Applied Financial Economics 1995, 5:257-264.
42. Ozkan-Gunay E.N., Tektas A. Efficiency analysis of the Turkish banking sector in pre crisis and crisis period: a DEA approach. Contemporary Economic Policy 2006, 24:418-431.
43. Park K., Weber W. A note on efficiency and productivity growth in the Korean banking industry, 1992-2002. Journal of Banking and Finance 2006, 30:2371-2386.
44. Podpiera J., Weill L. Bad luck or bad management? Emerging banking market experience. Journal of Financial Stability 2008, 4:135-148.
45. Sealey C., Lindley J.T. Inputs, outputs and a theory of production and cost at depository financial institutions. Journal of Finance 1977, 32:1251-1266.
46. Staikouras C., Mamatzakis E., Koutsomanoli-Filippaki A. Cost efficiency of the banking industry in the South Eastern European region. Journal of International Financial Markets, Institutions and Money 2008, 18:483-497.
47. Yildirim, C., 2010. Cherry Picking or Driving Out Bad Management: Foreign Acquisitions in Turkish Banking. Working Paper, Economic Research Forum.