Measuring Relative Efficiency of Commercial Banks in Bahrain Using Data Envelopment Analysis
International Journal of Economics, Finance and Management Sciences
Volume 2, Issue 6, December 2014, Pages: 297-305
Received: Nov. 6, 2014;
Accepted: Nov. 17, 2014;
Published: Nov. 20, 2014
Views 3111 Downloads 326
Minwir Al-Shammari, Department of Management and Marketing, College of Business Administration, University of Bahrain, Kingdom of Bahrain
Seref Turen, Department of Economics and Finance, College of Business Administration, University of Bahrain, Kingdom of Bahrain
Mohamed S. Abou El-Seoud, Department of Economics and Finance, College of Business Administration, University of Bahrain, Kingdom of Bahrain
The study aims at measuring relative efficiency of seven banks listed on Bahrain Bourse under the commercial banks sub-sector over the period 2008-2012 by employing Data Envelopment Analysis (DEA) as a special linear programming model that assesses relative efficiency of decision-making units (DMUs) using multiple incommensurable input and multiple incommensurable output measures. By adopting the production approach of DEA with restricted choice of variables, the study has isolated the relatively efficient banks that achieved total efficiency score from those that could not achieve it. The study has also identified input and output slacks of inefficient banks and suggested the efficient input and output targets for improvement.
Mohamed S. Abou El-Seoud,
Measuring Relative Efficiency of Commercial Banks in Bahrain Using Data Envelopment Analysis, International Journal of Economics, Finance and Management Sciences.
Vol. 2, No. 6,
2014, pp. 297-305.
AlKhathlan, K., & Malik, S. A. (2010). Are Saudi banks efficient? Evidence using data envelopment analysis (DEA). International Journal of Economics and Finance, 2(2), 53-59.
Berger, A. N., & Humphrey, D. B. (1997). Efficiency of financial institutions: international survey and directions for future research. European Journal of Operational Research, 98(2), 175-212.
Bilal, H., & Khursheed, A. (2011). Returns to scale of Islamic banks vs small commercial banks in Pakistan. European Journal of Economics Finance and Administrative Sciences, (30), 136-152.
Boussofiane, A., Dyson, R., & Rhodes, E. (1991). Applied DEA. European Journal of Operational Research, 2(6), 1-15.
Jones, J., Izzeldin, M., & Pappas V. (2012). A comparison of performance of Islamic and Conventional Banks 2004 to 2009. Lancaster University Management School Working Paper, April.
Kamaruddin, B. H., Safa, M. S., & Rohani, M (2008). Assessing production efficiency of Islamic banks and conventional banks Islamic windows in Malaysia. International Journal of Business and Management Sciences, 1(1), 31-48.
Kumar S, and Gulati, R, (2008). An Examination of Technical, Pure Technical, and Scale Efficiencies in Indian Public Sector Banks using Data Envelopment Analysis. Eurasian Journal of Business and Economics, 1(2), 33-69.
Marie, A., Al-Nasser, A., & Ibrahim, M. (2013). Operational-profitability-quality performance of Dubai’s banks: Parallel DEA analysis. Journal of Management Research, 13(1): 25-34.
Mostafa, M. (2007). Benchmarking top Arab bank’s efficiency through efficient frontier analysis. Industrial Management and Data Systems, 107(6), 802-23.
Qureshi, M. A. & Shaikh, M. (2012). Efficiency of Islamic and conventional banks in Pakistan: A nonparametric approach. International Journal of Business and Management, 7(7), 40-51.
Rahman, M. M. (2011). Different parametric and nonparametric approaches to model the efficiency of Islamic and conventional banks in Bangladesh. International Journal of Business and Management Sciences, 4(2), 147-175.
Shahid, H., Rehman, R., Niazi, G. S. K., & Raoof, A. (2010). Efficiencies comparison of Islamic and conventional banks of Pakistan. International Research Journal of Finance and Economics, 49, 24-42.
Srairi, S. A., (2010). Efficiency of the Saudi Banking Sector: A DEA approach. Bankers Markets and Investors, 108, September-October, 31-46.
Srairi, S. A., (2011) Productivity growth in the GCC banking industry: conventional vs. Islamic banks. Journal of Knowledge Globalization, 4(2): 59-90.
Tone, K. (2001). A slacks-based measure of efficiency in DEA. European Journal of Operational Research, 130, 498-509.
Tone, (2002). A slacks-based measure of super-efficiency in DEA, European Journal of Operational Research, 143, 32-41.