Profitability of a sample of Portuguese bank branches and its decomposition into technical and allocative components

European Journal of Operational Research

Volumn 162, Issue 3, 2005, Pages 850-866

  Portela, Maria Conceição A Silva ^a,b   Thanassoulis, Emmanuel ^b  

^a CBQF CENTRO DE BIOTECNOLOGIA E QUÍMICA FINA LABORATÓRIO ASSOCIADO   (Portugal)

^b ASTON UNIVERSITY   (United Kingdom)

Author keywords

Bank branches; Data envelopment analysis; Profit efficiency

Indexed keywords

COST BENEFIT ANALYSIS; COSTS; DATA REDUCTION; MATHEMATICAL MODELS; PRODUCTION ENGINEERING; SOCIETIES AND INSTITUTIONS;

BANK BRANCHES; COST EFFICIENCIES; DATA ENVELOPEMENT ANALYSIS; PROFIT EFFICIENCY;

COST EFFECTIVENESS;

EID: 9544244773     PISSN: 03772217     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.ejor.2003.10.018     Document Type: Article

References (31)

1. Athanassopoulos, A.D., 1997. 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 98, 300-313.
2. Banker, R.D., 1984. Estimating most productive scale size using data envelopment analysis. European Journal of Operational Research 17, 35-44.
3. Banker, R.D., Maindiratta, A., 1988. Nonparametric analysis of technical and allocative efficiencies in production. Econometrica 56 (6), 1315-1332.
4. Berger, A.N., Mester, L.J., 2000. Inside the black box; what explains differences in the efficiencies of financial institutions. In: Harker, P.T., Zenios, S.A. (Eds.), Performance of Financial Institutions; Efficiency, Innovation and Regulation. Cambridge University Press, Cambridge, UK, pp. 93-150.
5. Berger, A.N., Hancock, D., Humphrey, D.B., 1993. Bank efficiency derived from the profit function. Journal of Banking and Finance 17, 314-347.
6. Berger, A.N., Leusner, J.H., Mingo, J.J., 1997. The efficiency of bank branches. Journal of Monetary Economics 40 (1), 141-162.
7. Camanho, A.S., Dyson, R.G., 1999. Efficiency, size, benchmarks and targets for bank branches: An application of data envelopment analysis. Journal of the Operational Research Society 50 (9), 903-915.
8. Chambers, R.G., Chung, Y., Färe, R., 1996. Benefit and distance functions. Journal of Economic Theory 70, 407-419.
9. Chambers, R.G., Chung, Y., Färe, R., 1998. Profit, directional distance functions, and Nerlovian efficiency. Journal of Optimization Theory and Applications 98 (2), 351-364.
10. Chavas, J.-P., Cox, T.L., 1999. A generalized distance function and the analysis of production efficiency. Southern Economic Journal 66 (2), 294-348.
11. Cherchye, L., Kuosmanen, T., Post, T., 2001. Non-parametric production analysis under alternative price conditions. Center for Economic Studies, Katholieke Universiteit Leuven, Discussion Paper Series DPS 01.05.
12. Cooper, W.W., Seiford, L.M., Tone, K., 2000. Data Envelopment Analysis: A Comprehensive Text with Models, Applications, References and DEA-Solver Software. Kluwer Academic Publishers, Boston.
13. Doukas, J., Switzer, L.N., 1991. Economics of scale and scope in Canadian branch banking. Journal of International Financial Markets Institutions and Money 1, 61-84.
14. Färe, R., Grosskopf, S., 1994. Cost and Revenue Constrained Production. Springer-Verlag, New York.
15. Färe, R., Grosskopf, S., Lovell, C.A.K., 1985. The Measurement of Efficiency of Production. Kluwer-Nijhoff Publishing, Boston.
16. Färe, R., Grosskopf, S., Lee, H., 1990. A nonparametric approach to expenditure constrained profit maximization. American Journal of Agricultural Economics 12 (3), 574-581.
17. Färe, R., Grosskopf, S., Lovell, A.K., 1994. Production Frontiers. Cambridge University Press, Cambridge.
18. Hartman, T.E., Storbeck, J.E., Byrnes, P., 2001. Allocative efficiency in branch banking. European Journal of Operational Research 134, 232-242.
19. Humphrey, D.B., Pulley, L.B., 1997. Bank's responses to deregulation; profits, technology, and efficiency. Journal of Money, Credit, and Banking 29 (1), 73-93.
20. Isik, I., Hassan, M.K., 2002. Technical, scale, and allocative efficiencies of Turkish banking industry. Journal of Banking and Finance 26, 719-766.
21. Kuosmanen, T., 1999. Some remarks on scale efficiency and returns to scale in DEA. Helsinki School of Economics and Business Administration.
22. Lovell, C.A.K., Sickles, R.C., 1983. Testing efficiency hypothesis in joint production: A parametric approach. Review of Economics and Statistics 65 (1), 51-58.
23. Lozano Vivas, A., 1997. Profit efficiency for Spanish savings banks. European Journal of Operational Research 98, 381-394.
24. Olesen, O.B., Petersen, N.C., 1996. Indicators of ill-conditioned data sets and model misspecification in Data Envelopment Analysis: An extended facet approach. Management Science 42 (2), 205-219.
25. Olesen, O.B., Petersen, N.C., 2002. Identification and use of efficient faces and facets in DEA. Journal of Productivity Analysis, Forthcoming.
26. Oral, M., Yolalan, R., 1990. An empirical study on measuring operating efficiency and profitability of bank branches. European Journal of Operational Research 46 (3), 282-294.
27. Pavlopoulos, P.O., Kouzelis, A.K., 1989. Cost behaviour in the banking industry: Evidence from a Greek commercial bank. Applied Economics 21, 285-293.
28. Portela, M.C.A.S., Thanassoulis, E., 2002. Profit efficiency in DEA. Aston Business School Research Paper RP 0206, ISBN 1 85449 502 X, University of Aston, Aston Triangle, Birmingham B4 7ET, UK.
29. Portela, M.C.A.S., Borges, P., Thanassoulis, E., 2003. Finding closest targets in non-oriented DEA models: The case of convex and non-convex technologies. Journal of Productivity Analysis 19 (2/3), 251-269.
30. Schaffnit, C., Rosen, D., Paradi, J.C., 1997. Best practice analysis of bank branches: An application of DEA in a large Canadian bank. European Journal of Operational Research 98, 269-289.
31. Siems, T.F., Clark, J., 1997. Rethinking bank efficiency and regulation: How off-balance-sheet activities make a difference. Federal Reserve Bank of Dallas, Financial Industry Studies, December, 1-12.