A Comparative Analysis of the Efficiency of Romanian Banks

by Andries, Alin Marius & Cocris, Vasile
Published in Romanian Journal of Economic Forecasting
, 2010, volume 13 issue 4, 54-75

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Abstract

In this paper, we analyze the efficiency of the main banks in Romania, the Czech Republic and Hungary for the period 2000-2006, by using the frontier analysis. For the estimation of efficiency of banking we used a nonparametric method the DEA Method (Data Envelopment Analysis) and a parametric method - the SFA Method (Stochastic Frontier Analysis). The results of the analyses show that the banks in the three East-European countries reach low levels of technical efficiency and cost efficiency, especially the ones in Romania, and that the main factors influencing the level of banks efficiency in these countries are: quality of assets; bank size, annual inflation rate; banking reform and interest rate liberalisation level and form of ownership.

Keywords: efficiency, banking, DEA method, SFA method
JEL Classification:
G21, C33