Determinants of commercial bank performance in transition: an application of data envelopment analysis

LTReikšminiai žodžiai: Bankininkystės sektorius; Bankų sektoriaus raida; Buvusi Sovietų Sąjunga; Finansinės institucijos; Pereinamoji ekonomika; Pereinamojo laikotarpio ekonomika; Rytų Europos šalys (Eastern Europe states); Banking sector; Banking sector development; Eastern Europe; Economies in transition; Financial institutions; Former Soviet Union; Transition economies.

ENBanking sectors in transition economies have experienced major transformations throughout the 1990s. While some countries have been successful in eliminating underlying distortions and restructuring their financial sectors, in some cases financial sectors remain underdeveloped and the rates of financial intermediation continue to be low. We estimate indicators of commercial bank efficiency by applying a version of Data Envelopment Analysis (DEA) to bank-level data from a wide range of transition countries. In addition to stressing the importance of some bank-specific variables, the censored Tobit analysis suggests that (1) foreign ownership with controlling power and enterprise restructuring enhances commercial bank efficiency; (2) the effects of prudential tightening on the efficiency of banks vary across different prudential norms; and (3) consolidation is likely to improve the efficiency of banking operations. Overall, the results confirm the usefulness of DEA for transition-related applications and shed some light on the question of the optimal architecture of a banking system. [From the publication]