Evaluating Bank Efficiency in the West Balkan Countries Using Data Envelopment Analysis
The financial systems of the West Balkan countries are mainly based on banks. For an efficient financial system, it is of immense importance that the banks operating in it do so with high levels of efficiency. Furthermore, efficiency is needed when it comes to involving banking institutions in the f...
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| Format: | Article |
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MDPI AG
2022-12-01
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| Series: | Mathematics |
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| Online Access: | https://www.mdpi.com/2227-7390/11/1/15 |
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| author | Aleksandra Marcikić Horvat Nada Milenković Branislav Dudić Branimir Kalaš Boris Radovanov Alexandra Mittelman |
| author_facet | Aleksandra Marcikić Horvat Nada Milenković Branislav Dudić Branimir Kalaš Boris Radovanov Alexandra Mittelman |
| author_sort | Aleksandra Marcikić Horvat |
| collection | DOAJ |
| description | The financial systems of the West Balkan countries are mainly based on banks. For an efficient financial system, it is of immense importance that the banks operating in it do so with high levels of efficiency. Furthermore, efficiency is needed when it comes to involving banking institutions in the financial flows in order to maintain sustainability of the financial construction. The aim of this paper is to determine whether there is a difference in efficiency between the considered countries and thus to show which changes the decisionmakers have to make in order to improve the efficiency of their banking systems. We analyze data from the revised financial statements of all banks operating in Albania, Bosnia and Herzegovina, Montenegro, North Macedonia and Serbia for the period from 2015 to 2019, using loans and investment as input variables and interest income, non-interest income and net income as output variables. The results obtained from the output-oriented DEA model with a variable return to scale have shown higher efficiency levels in North Macedonia, Bosnia and Herzegovina and Montenegro, while Serbia and Albania show lower efficiency. The individual analyses have shown that in order to improve efficiency levels, improvement is needed more in the correction of the investment amounts then in loan placements. |
| first_indexed | 2024-03-11T09:55:23Z |
| format | Article |
| id | doaj.art-ca796e4c30fa44219aee60546e2701b7 |
| institution | Directory Open Access Journal |
| issn | 2227-7390 |
| language | English |
| last_indexed | 2024-03-11T09:55:23Z |
| publishDate | 2022-12-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Mathematics |
| spelling | doaj.art-ca796e4c30fa44219aee60546e2701b72023-11-16T15:52:14ZengMDPI AGMathematics2227-73902022-12-011111510.3390/math11010015Evaluating Bank Efficiency in the West Balkan Countries Using Data Envelopment AnalysisAleksandra Marcikić Horvat0Nada Milenković1Branislav Dudić2Branimir Kalaš3Boris Radovanov4Alexandra Mittelman5Faculty of Economics in Subotica, University of Novi Sad, 24000 Subotica, SerbiaFaculty of Economics in Subotica, University of Novi Sad, 24000 Subotica, SerbiaFaculty of Management, Comenius University Bratislava, 82005 Bratislava, SlovakiaFaculty of Economics in Subotica, University of Novi Sad, 24000 Subotica, SerbiaFaculty of Economics in Subotica, University of Novi Sad, 24000 Subotica, SerbiaFaculty of Management, Comenius University Bratislava, 82005 Bratislava, SlovakiaThe financial systems of the West Balkan countries are mainly based on banks. For an efficient financial system, it is of immense importance that the banks operating in it do so with high levels of efficiency. Furthermore, efficiency is needed when it comes to involving banking institutions in the financial flows in order to maintain sustainability of the financial construction. The aim of this paper is to determine whether there is a difference in efficiency between the considered countries and thus to show which changes the decisionmakers have to make in order to improve the efficiency of their banking systems. We analyze data from the revised financial statements of all banks operating in Albania, Bosnia and Herzegovina, Montenegro, North Macedonia and Serbia for the period from 2015 to 2019, using loans and investment as input variables and interest income, non-interest income and net income as output variables. The results obtained from the output-oriented DEA model with a variable return to scale have shown higher efficiency levels in North Macedonia, Bosnia and Herzegovina and Montenegro, while Serbia and Albania show lower efficiency. The individual analyses have shown that in order to improve efficiency levels, improvement is needed more in the correction of the investment amounts then in loan placements.https://www.mdpi.com/2227-7390/11/1/15bank efficiencyfinance sustainabilitydata envelopment analysisprofit approachWest Balkan countries |
| spellingShingle | Aleksandra Marcikić Horvat Nada Milenković Branislav Dudić Branimir Kalaš Boris Radovanov Alexandra Mittelman Evaluating Bank Efficiency in the West Balkan Countries Using Data Envelopment Analysis Mathematics bank efficiency finance sustainability data envelopment analysis profit approach West Balkan countries |
| title | Evaluating Bank Efficiency in the West Balkan Countries Using Data Envelopment Analysis |
| title_full | Evaluating Bank Efficiency in the West Balkan Countries Using Data Envelopment Analysis |
| title_fullStr | Evaluating Bank Efficiency in the West Balkan Countries Using Data Envelopment Analysis |
| title_full_unstemmed | Evaluating Bank Efficiency in the West Balkan Countries Using Data Envelopment Analysis |
| title_short | Evaluating Bank Efficiency in the West Balkan Countries Using Data Envelopment Analysis |
| title_sort | evaluating bank efficiency in the west balkan countries using data envelopment analysis |
| topic | bank efficiency finance sustainability data envelopment analysis profit approach West Balkan countries |
| url | https://www.mdpi.com/2227-7390/11/1/15 |
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