The Optimum Scale Activity and Stability of Pure Technical Efficiency in the Commercial Banking System of Iran with DEA Window Analysis (1991-2006)

اقتصاد پولی مالی

Article 5, Volume 17, Issue 34, January 2011   

Document Type: پژوهشی

DOI: 10.22067/pm.v17i34.27352

Author

Ehsan Rajabi^*

Abstract

In the commercial banking activities, efficiency is an important issue for the bank managers, monitoring part and clients. This study has appraised the efficiency performance of the commercial banks in Iran. The research method has been using Windows Data Envelopment Analysis with constant and variable returns to scale and input oriented model at the period of 1991-2006. The sample of study was the whole public commercial banks and consisted of Melli bank, Saderat bank, Tejarat bank, Sepah bank and Refah Kargaran bank. Input variables are labor force, fixed asset, deposits and ratio of number of branches to the number of automatic translate machines. The credit facilities investment and gross profit are output variables for the selected Banks.
The results show that Mali and Refah Kargaran Banks are more efficient than the others. In the conditions of variable returns to scale, stability and sustainability of efficiency performance are not well in1991-2006. The pure technical efficiency of commercial banks has been increased by increasing in asset but not optimized.
Commercial banks work in increasing return to scale and for have higher level of efficiency, the banks can have bigger scale activity.

Keywords

Efficiency; Data Envelopment Analysis; Window Analysis; Commercial Banking System of Iran