Modeling the operating efficiency of banks: a nonparametric methodology
Abstract
This paper seeks to model and evaluate the comparative operating efficiency of banks using a non‐parametric methodology known as the data envelopment analysis (DEA). The paper adopts a modified version of DEA in which no inputs are specified. The only variables considered are the financial ratios. The results obtained suggest that the majority of banks investigated are fairly inefficient over the period 1991‐94. In addition to calculating efficiency scores for all banks in the sample, the study results revealed the composite reference set and their shadow prices, major determinants of banks’ relative performance, and the target financial ratios.
Keywords
Citation
Al‐Shammari, M. and Salimi, A. (1998), "Modeling the operating efficiency of banks: a nonparametric methodology", Logistics Information Management, Vol. 11 No. 1, pp. 5-17. https://doi.org/10.1108/09576059810202196
Publisher
:MCB UP Ltd
Copyright © 1998, MCB UP Limited