Measurement of European banking industry cost efficiency
Abstract
The main goal of the paper is to measure and to analyse the efficiency results of banking industry by using mathematical linear programming method, DEA. Cost efficiency is tested for the period 2008-2012 on the sample of EU-28. The results suggest that banking systems of post-transition countries have higher cost efficiency. Those systems still have dominant deposit lon-term financing base, but also have specific competition, risk exposure, financial and macroeconomic environment, which have significant influence on financial services prices and as a consequence potentially higher banking sector earnings. DEA efficiency results are compared with chosen accounting cost efficiency ratios as well, to see if there exists correlation between the results of different cost efficiency measurement methodologies. The main difference was remarked in sense of accounting approach efficiency measurement scores lag. This comparison can help in bringing to more precise conclusion about banking industry efficiency.Downloads
Additional Files
Published
Issue
Section
License
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
