Acta Univ. Agric. Silvic. Mendelianae Brun. 2012, 60(2), 357-366 | DOI: 10.11118/actaun201260020357

Efficiency in the Czech banking industry: A non-parametric approach

Daniel Stavárek, Iveta Řepková
Katedra financí, Slezská univerzita v Opavě, Obchodně podnikatelská fakulta v Karviné, Univerzitní náměstí 1934/3, 733 40 Karviná, Česká republika

This paper estimates the efficiency of the Czech commercial banks in the period 2001-2010 using the non-parametric Data Envelopment Analysis. We simultaneously use two alternative specifications - CCR model and BCR model - that differ in returns to scale assumption. Differences in estimated efficiency scores of individual banks are quite large up to 70 percentage points. Largest banks perform significantly worse than mid-size and small banks. This efficiency gap decreases if variable returns to scale are considered in the estimation. The average efficiency in the banking sector remained nearly unchanged during the analysed period. Although each year is estimated separately one can observe a deterioration of average efficiency during the recent crisis period.

Keywords: efficiency, Data Envelopment Analysis, banking sector, Czech Republic, CCR model, BCR model
Grants and funding:

Research behind this paper was supported by the Student Grant Competition of Silesian University within the project SGS/25/2010 'Financial integration in the EU and its effect on corporate sector'.

Received: November 30, 2011; Published: October 3, 2013  Show citation

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Stavárek, D., & Řepková, I. (2012). Efficiency in the Czech banking industry: A non-parametric approach. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 60(2), 357-366. doi: 10.11118/actaun201260020357
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