Browsing by Author "Andrade, Maria Beatriz Pestana de"
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- Efficiency analysis in german banks : an application of Data Envelopment Analysis for the 2013-2016 periodPublication . Andrade, Maria Beatriz Pestana de; Bhimjee, Diptes Chandrakante PrabhudasThe present Dissertation’s academic research question addresses the assessment of the relative efficiency of German banks for the 2013-2016 period. In order to address the latter research question, this document’s empirical research strategy essentially employs a two-step approach. It first uses an established methodology, entitled Data Envelopment Analysis (D.E.A.), producing a set of baseline findings associated with the efficient measurement of German banking efficiency for the said period. Second, it subsequently employs a robustness check, through the estimation of the Malmquist Productivity Index, in order to extend the critical baseline analysis to an intertemporal framework. The overall findings reflect a proficient and stable assessment of relative efficiency measurement for the German banking industry as a whole (as represented by the chosen sample), by accurately identifying any potential inefficiency sources, which can be potentially improved upon. The banking data were extracted from ORBIS® BankFocus. The inputs considered are deposits and interest expense, while the outputs are loans and interest income. These inputs and outputs were analysed both separately and simultaneously, according to three different approaches: i) deposits and interest expense to loans and interest income; ii) deposits to loans; and iii) interest expense to interest income. An output-oriented approach was also conducted, as model applications test the maximization of outputs for a given level of inputs. Lastly, both constant and variable returns to scale assumptions were addressed in the present Dissertation. The present Dissertation’s overall findings associated with the efficiency measurement related to the performance of the German banking industry are quite stable across the different model applications, notwithstanding some minor expected differences according to the set of model inputs/outputs chosen. This stability also suggests that some banks are more revenue-oriented, while others are more asset-oriented. It is hoped that the findings might contribute to the performance improvement of the Euro Area’s most powerful banking industry.