Ahmad, Usman (2011): Financial Reforms and Banking Efficiency: Case of Pakistan. Forthcoming in:
Download (356kB) | Preview
This paper attempts to analyze the performance of the banking sector of Pakistan in the light of second generation reforms on the domestic scheduled banks by using data from 1990 to 2008. For this purpose I used Non Parametric Data Envelopment Analysis (DEA). The analysis revealed an overall improvement in the efficiency of commercial banks. It implies that financial sector reforms, particularly the second phase of reforms, improved the efficiency of the commercial bank in Pakistan. After the reforms, pure technical efficiency increased as compared to scale efficiency and it was found that the overall efficiency of the industry has increased due to pure technical efficiency. The study concludes that the reforms were successful in improving the efficiency of the domestic commercial banks in Pakistan.
|Item Type:||MPRA Paper|
|Original Title:||Financial Reforms and Banking Efficiency: Case of Pakistan|
|English Title:||Financial Reforms and Banking Efficiency: Case of Pakistan|
|Keywords:||Efficiency, Banks, DEA, Pakistan|
|Subjects:||E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies
G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages
|Depositing User:||Usman Ahmad|
|Date Deposited:||01. Nov 2011 16:40|
|Last Modified:||16. Feb 2013 05:27|
Akhter, M. H., 2002, “X-Efficiency Analysis of Commercial Banks in Pakistan: A Preliminary Investigation”, The Pakistan Development Review, 41:4 Part II (Winter 2002) pp. 567–580.
Altunbas, Y., Goddard, J. and Molyneux, P., 1999, “Technical change in Banking”. Economic Letters Vol. 64, issue 2, pages 215-221.
Aly, H.Y., Grabowski, R., Pasurka, C. and Rangan, N., 1990, “Technical, Scale and Allocative Efficiencies in U.S Banking: An Empirical Investigation” The Review of Economics and Statistics.
Banker, R. D., and Maindiratla, A., 1988, “Nonparametric analysis of technical and allocative efficiencies in production”, Econometrica, Vol. 56, No. 6, pp. 1315-32.
Banker, R. D., Charness, A. and Cooper, W. W., 1984, “Some models for estimating technical and scale inefficiencies in data envelopment analysis”, Management Science, Vol. 30, No. 9, pp. 1078-92.
Berg, Sigbjorn Atle, S. Matti, Hjalmarsson, Lennart and Suominen, 1993, “Banking Efficiency in the Nordic Countries” Journal of Banking and Financ, Vol. 17, issue 2-3, pages 371-388.
Berger, A. A. and Humphery, D. B., 1997, “Efficiency of Financial Institutions: International Survey and Directions for Future Research”. European Journal of Operations Research (especial issue) Vol. 98.
Berger, A. N. and Humphrey, D. B., 1990, “Measurement and efficiency issues in Commercial banking”, Charleston, SC., paper presented at a NBER Conference on Research on Income and Wealth.
Berger, A., Leusner, J., and Mingo J., 1997, “The efficiency of bank branches”. Journal of Monetary Economics.
Burki, A. A. and Niazi, G. S. K., 2003, “The Effects of Privatization, Competition and Regulation on Banking Efficiency in Pakistan, 1991–2000”. Regulatory Impact Assessment: Strengthening Regulation Policy and Practice, Chancellors Conference Centre, University of Manchester, Manchester, UK.
Charnes, A., Cooper, W. Wand, and Rhodels, E., 1978, “Measuring the efficiency of decision making units”, European Journal of Operational Research, Vol. 2, No. 6, pp. 429-44.
Coelli, T., 1996, “A Guide to DEAP Version 2.1 Data Envelopment Analysis (Computer) Program”, CEPA Working Paper 96/08.
Din, Musleh-ud, Ghani, E. and Qureshi, S. K., 1996, “Scale and Scope Economies in Banking: A Case Study of the Agriculture Development Bank (ZTBL) of Pakistan”. The Pakistan Development Review.
Favero, C. A. and Papi, L., 1995, “Technical Efficiency and Scale Efficiency in the Italian Banking Sector: A Non-Parametric Approach”, Journal of Applied Economics, Vol. 27.
Gould, B and Roll, Y., 1989, “An application procedure for data envelopment analysis”, OMEGA, Vol. 17, No. 3, pp.237-52. Government of Pakistan, 2005-06 & 2007-08, “Economic Survey”, Ministry of Finance, Economic Advisory Wing, Islamabad.
Haque, Ul Nadeem, 1997, “Financial Market Reforms in Pakistan,” The Pakistan Development Review Part-II, pp: 839-854.
Hardy, D and Patti, E., 2003, “The Effects of Banking System Reforms in Pakistan” IMF Working Paper.
Hardy, Daniel C., and De Patti, Emilia Bonaccorsi, 2001, “Bank Reforms and Bank Efficiency in Pakistan” IMF Working Paper WP/01/138).
Hassan, Y.A., Grabowski, R., Pasurka, C and Rangan, N., 1990, “Technical, Scale and Allocative Efficiencies in U S Banking: Ann Empirical Investigation”, The Review of Economics and Statistics, Vol. 72, No. 2, pp. 211-18.
John C. Topuz, Ali F. Darrat and Shelor, Roger M., 2005, “Technical, Allocative and Scale Efficiencies of REITs: An Empirical Inquiry” Journal of Business, Finance & Accounting Vol. 32, issue 9-10, pages 1961-1994.
Mlima, Hjalmarsson, 2002, “Measurement of Inputs and Outputs in the Banking Industry” Tanzanet Journal Vol. 3(1).
State Bank of Pakistan (various issues) “Banking Statistics of Pakistan.”
State Bank of Pakistan (various Issues) “Financial Sector Assessment.”