A Nerlovian cost inefficiency two-stage DEA model for modeling banks’ production process: Evidence from the Turkish banking system
By developing a two-stage model the paper examines the cost inefficiency levels of Turkish banks during the period from 2007 to 2016. Using the notion of Koopmans input efficiency we deconstruct the estimated Nerlovian cost inefficiency to the sum of slack-based allocative and technical inefficiency...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Elsevier Ltd.
2020
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| Subjects: | |
| Online Access: | https://repo.uum.edu.my/id/eprint/27157/1/O%2095%202020%201%2013.pdf |
| _version_ | 1825805600923058176 |
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| author | Fukuyama, Hirofumi Matousek, Roman Tzeremes, Nickolaos G. |
| author_facet | Fukuyama, Hirofumi Matousek, Roman Tzeremes, Nickolaos G. |
| author_sort | Fukuyama, Hirofumi |
| collection | UUM |
| description | By developing a two-stage model the paper examines the cost inefficiency levels of Turkish banks during the period from 2007 to 2016. Using the notion of Koopmans input efficiency we deconstruct the estimated Nerlovian cost inefficiency to the sum of slack-based allocative and technical inefficiency levels. Alongside the traditional inputs, intermediates and outputs used to model banks’ performance measure we additionally use their labor education quality factor as a non-discretionary input. This allows us to model how human capital factors affect a bank's revenue generation stage. Our findings suggest that cost inefficiency levels are driven mainly by a bank's ability to control its allocative inefficiency levels. The empirical evidence also shows that foreign banks perform better, suggesting that bank ownership structures matter when measuring cost performance. Finally, it is evident that the Global Financial Crisis (GFC) had a negative effect on banks’ ability to minimize their cost inefficiency levels. However, the post-crisis findings demonstrate that Turkish banks have started to recover from its negative effects, mainly by improving their allocative performance. |
| first_indexed | 2024-07-04T06:34:57Z |
| format | Article |
| id | uum-27157 |
| institution | Universiti Utara Malaysia |
| language | English |
| last_indexed | 2024-07-04T06:34:57Z |
| publishDate | 2020 |
| publisher | Elsevier Ltd. |
| record_format | eprints |
| spelling | uum-271572020-06-29T01:54:01Z https://repo.uum.edu.my/id/eprint/27157/ A Nerlovian cost inefficiency two-stage DEA model for modeling banks’ production process: Evidence from the Turkish banking system Fukuyama, Hirofumi Matousek, Roman Tzeremes, Nickolaos G. HJ Public Finance By developing a two-stage model the paper examines the cost inefficiency levels of Turkish banks during the period from 2007 to 2016. Using the notion of Koopmans input efficiency we deconstruct the estimated Nerlovian cost inefficiency to the sum of slack-based allocative and technical inefficiency levels. Alongside the traditional inputs, intermediates and outputs used to model banks’ performance measure we additionally use their labor education quality factor as a non-discretionary input. This allows us to model how human capital factors affect a bank's revenue generation stage. Our findings suggest that cost inefficiency levels are driven mainly by a bank's ability to control its allocative inefficiency levels. The empirical evidence also shows that foreign banks perform better, suggesting that bank ownership structures matter when measuring cost performance. Finally, it is evident that the Global Financial Crisis (GFC) had a negative effect on banks’ ability to minimize their cost inefficiency levels. However, the post-crisis findings demonstrate that Turkish banks have started to recover from its negative effects, mainly by improving their allocative performance. Elsevier Ltd. 2020 Article PeerReviewed application/pdf en https://repo.uum.edu.my/id/eprint/27157/1/O%2095%202020%201%2013.pdf Fukuyama, Hirofumi and Matousek, Roman and Tzeremes, Nickolaos G. (2020) A Nerlovian cost inefficiency two-stage DEA model for modeling banks’ production process: Evidence from the Turkish banking system. Omega, 95. pp. 1-13. ISSN 03050483 http://doi.org/10.1016/j.omega.2020.102198 doi:10.1016/j.omega.2020.102198 doi:10.1016/j.omega.2020.102198 |
| spellingShingle | HJ Public Finance Fukuyama, Hirofumi Matousek, Roman Tzeremes, Nickolaos G. A Nerlovian cost inefficiency two-stage DEA model for modeling banks’ production process: Evidence from the Turkish banking system |
| title | A Nerlovian cost inefficiency two-stage DEA model for modeling banks’ production process: Evidence from the Turkish banking system |
| title_full | A Nerlovian cost inefficiency two-stage DEA model for modeling banks’ production process: Evidence from the Turkish banking system |
| title_fullStr | A Nerlovian cost inefficiency two-stage DEA model for modeling banks’ production process: Evidence from the Turkish banking system |
| title_full_unstemmed | A Nerlovian cost inefficiency two-stage DEA model for modeling banks’ production process: Evidence from the Turkish banking system |
| title_short | A Nerlovian cost inefficiency two-stage DEA model for modeling banks’ production process: Evidence from the Turkish banking system |
| title_sort | nerlovian cost inefficiency two stage dea model for modeling banks production process evidence from the turkish banking system |
| topic | HJ Public Finance |
| url | https://repo.uum.edu.my/id/eprint/27157/1/O%2095%202020%201%2013.pdf |
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