Efficiency Measures of the Greek Banking Sector: A Non-Parametric Approach for the Period 1997-1999

Halkos, George and Salamouris, Dimitrios (2001): Efficiency Measures of the Greek Banking Sector: A Non-Parametric Approach for the Period 1997-1999.

Abstract

This study explores the efficiency of the Greek Banking sector with the use of a number of suggested financial efficiency ratios for the time period 1997-99. A non-parametric analytic technique (Data Envelopment Analysis) is employed for measuring efficiency. The suggested model in our analysis offers an empirical reference set for comparing the inefficient banks with the efficient ones. For each year we estimate the relative efficiency and determine the feasible targets for improvement of each bank. The analysis shows that, the total improvement in efficiency in the Banking sector is mainly attributed to the increase in the efficiency ratio resulting from the significant increase in revenues mainly from their activation in the Greek Stock Exchange Market. We find that the higher the size of total assets the higher the efficiency is. We also show that the increase in efficiency is accompanied with a reduction in the number of small banks due to mergers and acquisitions.

• Item Type: MPRA Paper
• Institution: University of Thessaly, Department of Economics
• Language: English
• Keywords: Banking; Financial ratios; Data Envelopment Analysis
• Subjects: C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C60 - General; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M4 - Accounting and Auditing > M40 - General; L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L25 - Firm Performance: Size, Diversification, and Scope

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