Assessment of revenue efficiency of Indian scheduled commercial banks

2018 ◽  
Vol 60 (6) ◽  
pp. 1234-1254
Author(s):  
Aparna Bhatia ◽  
Megha Mahendru
Keyword(s):  
Commercial Banks ◽  
Design Methodology ◽  
Empirical Work ◽  
Specific Reference ◽  
Data Envelopment ◽  
Parametric Approach ◽  
Tobit Regression ◽  
Content Type ◽  
Revenue Efficiency ◽  
Better Than

Purpose This paper aims to endeavour to assess revenue efficiency (RE) scores of Scheduled Commercial Banks operating in India. Differences in RE are studied across varying ownership as well. The study also determines the nature of return to scale of Indian SCBs as whole as well as classified across ownership. Number of banks operating as leaders and laggards has also been calculated. Design/methodology/approach RE of banks is calculated by using the non-parametric approach, namely, data envelopment analysis (DEA). Further, the differences in the efficiency scores are examined by applying Panel Tobit Regression. Findings The results of DEA suggest that none of the banks has ever achieved full RE score of 1 in any of the years under study. An inconsistent pattern of RE is seen. Private sector banks have performed better than their counterparts in public and foreign sector. Maximum number of banks operating on decreasing return to scale are from public sector, and the highest number of banks operating on constant return to scale belong to Foreign Sector. More number of banks operates as laggards in the Indian financial system. Thus, there still exists room for improvement for banks in all sectors. Originality/value With specific reference to India, less empirical work has been carried out with respect to RE. As only two studies so far from the literature are available that consider RE exclusively, namely, Ram Mohan and Ray (2004) and Bhatia and Mahendru (2015). However, Ram Mohan and Ray (2004) considered only the reformatory phase, whereas Bhatia and Mahendru (2015) analyzed the performance for specific points of time only. None of the study has been able to give any concrete findings according to sector-wise performance of banks in terms of RE parameters.

Revenue efficiency analysis of scheduled commercial banks in a dynamic environment

2015 ◽  
Vol 8 (2) ◽  
pp. 184-210 ◽  
Author(s):  
Aparna Bhatia ◽  
Megha Mahendru
Keyword(s):  
Commercial Banks ◽  
Banking Sector ◽  
Allocative Efficiency ◽  
Empirical Work ◽  
Dynamic Environment ◽  
Specific Reference ◽  
Content Type ◽  
Customer Base ◽  
Public Sector Banks ◽  
Revenue Efficiency

Purpose – The paper aims to analyze the revenue efficiency (RE) of Scheduled Commercial Banks in India. The study also determines the nature of Return to Scale (RTS) of banks and thereby identifies the leaders and laggards in the Indian Banking Sector. Design/methodology/approach – RE of banks is calculated by using the non-parametric approach, namely, data envelopment analysis. Further, the efficiency scores are decomposed into technical and allocative efficiency. Findings – Public Sector Banks have higher RE as compared to their counterparts in private and foreign sectors. The choice of operating on incorrect scale is identified as the primary reason of inefficiency. It is suggested that banks should expand their business by opening new branches and also try to increase their customer base. Overall, it is seen that trends in RE are somewhat affected by the dynamism in the environment along with the bank-specific factors. Originality/value – With specific reference to India, less empirical work has been carried out with respect to RE. None of the studies has identified that revenue inefficiency is caused either by mispricing of outputs or giving wrong choice of outputs.

Cost, revenue and profit efficiency analysis of Indian scheduled commercial banks

2017 ◽  
Vol 59 (3) ◽  
pp. 442-462 ◽  
Author(s):  
Megha Mahendru ◽  
Aparna Bhatia
Keyword(s):  
Public Sector ◽  
Commercial Banks ◽  
Empirical Work ◽  
Specific Reference ◽  
Profit Efficiency ◽  
Content Type ◽  
Output Synchronization ◽  
Efficiency Performance ◽  
Private And Public ◽  
The Cost

Purpose This paper aims to analyze the cost, revenue and profit efficiency performance of Indian scheduled commercial banks. The study also determines differences if any related to efficiency among banks on the basis of ownership pattern. Design/methodology/approach Cost, revenue and profit efficiency of banks is calculated by using the non-parametric approach, namely, data envelopment analysis. Further, the differences in the efficiency scores are examined by applying analysis of variance. Findings Indian scheduled commercial banks have not been able to maintain their input-output synchronization in terms of cost, revenue and profits in the year 2012-2013. Foreign sector banks have higher cost and profit efficiency as compared to their counterparts in private and public sector, whereas public sector banks are found to have been more revenue efficient. Originality/value With specific reference to India, less empirical work has been carried out with respect to cost, revenue and profit efficiency. None of the studies have evaluated the sector-wise performance of banks in terms of all three efficiency parameters.

Cost efficiency analysis of scheduled commercial banks: empirical evidence from India

2018 ◽  
Vol 37 (7) ◽  
pp. 586-602
Author(s):  
Aparna Bhatia ◽  
Megha Mahendru
Keyword(s):  
Cost Efficiency ◽  
Commercial Banks ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Allocative Efficiency ◽  
Specific Reference ◽  
Tobit Regression ◽  
Content Type ◽  
Cost Inefficiency ◽  
Indian Banks

Purpose The purpose of this paper is to analyze and evaluate cost efficiency (CE) scores of Indian Scheduled Commercial Banks (SCBs) in India over a period of 22 years, i.e. 1991–1992 to 2012–2013. Design/methodology/approach Data envelopment analysis (DEA) – a non-parametric approach is used to calculate efficiency scores of banks. Further the efficiency scores are decomposed into technical and allocative efficiency. The differences in the efficiency scores across ownership as well as across reformatory and post-reformatory era are examined by applying Panel Tobit Regression. Findings The paper also identifies the reason for cost inefficiency among Indian banks. In addition, the nature of their return to scale of all SCBs has also been evaluated. The results of the paper depict that Indian SCBs have never achieved full CE score of 1 in any of the years of study. The dominant reason identified behind cost inefficiency is allocative inefficiency. Surprisingly, the results also highlight that SCBs exhibit higher CE scores in reformatory era as compared to the post-reformatory era. Originality/value With specific reference to India, even lesser literature is found on CE. Indian banking sector has witnessed many changes on account of liberalization, privatization and globalization (LPG). Before banks adapted to the new environment, the global financial crisis acted as a fuel to fire affecting the performance of banks. Thus, a reassessment over a longer period would help to know a wholistic view of the issue of cost inefficiency, which has always been a troubling factor for Indian banks.

Measuring operational efficiency of isolation hospitals during COVID-19 pandemic using data envelopment analysis: a case of Egypt

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mahmoud Abdelrahman Kamel ◽  
Mohamed El-Sayed Mousa
Keyword(s):  
Data Envelopment Analysis ◽  
Design Methodology ◽  
Operational Efficiency ◽  
Data Envelopment ◽  
Allocation Of Resources ◽  
Tobit Regression ◽  
Health Crisis ◽  
Content Type ◽  
Dea Analysis ◽  
Using Data

PurposeThis study used Data Envelopment Analysis (DEA) to measure and evaluate the operational efficiency of 26 isolation hospitals in Egypt during the COVID-19 pandemic, as well as identifying the most important inputs affecting their efficiency.Design/methodology/approachTo measure the operational efficiency of isolation hospitals, this paper combined three interrelated methodologies including DEA, sensitivity analysis and Tobit regression, as well as three inputs (number of physicians, number of nurses and number of beds) and three outputs (number of infections, number of recoveries and number of deaths). Available data were analyzed through R v.4.0.1 software to achieve the study purpose.FindingsBased on DEA analysis, out of 26 isolation hospitals, only 4 were found efficient according to CCR model and 12 out of 26 hospitals achieved efficiency under the BCC model, Tobit regression results confirmed that the number of nurses and the number of beds are common factors impacted the operational efficiency of isolation hospitals, while the number of physicians had no significant effect on efficiency.Research limitations/implicationsThe limits of this study related to measuring the operational efficiency of isolation hospitals in Egypt considering the available data for the period from February to August 2020. DEA analysis can also be an important benchmarking tool for measuring the operational efficiency of isolation hospitals, for identifying their ability to utilize and allocate their resources in an optimal manner (Demand vs Capacity Dilemma), which in turn, encountering this pandemic and protect citizens' health.Originality/valueDespite the intensity of studies that dealt with measuring hospital efficiency, this study to the best of our knowledge is one of the first attempts to measure the efficiency of hospitals in Egypt in times of health' crisis, especially, during the COVID-19 pandemic, to identify the best allocation of resources to achieve the highest level of efficiency during this pandemic.

scholarly journals Measuring Bank Efficiency: Evidence from the Tanzanian Banking Sector

2013 ◽  
Vol 8 (1) ◽  
pp. 1239-1251
Author(s):  
Zawadi Ally ◽  
Dr. G.N. Patel
Keyword(s):  
Data Envelopment Analysis ◽  
Commercial Bank ◽  
Commercial Banks ◽  
Banking Sector ◽  
Data Envelopment ◽  
Parametric Approach ◽  
Tobit Regression ◽  
Bank Efficiency ◽  
Constant Return ◽  
Crs Model

The objective of this study is to measure the efficiency of commercial banks in Tanzania using a non-parametric approach, the input-oriented data envelopment analysis (DEA), both by constant return to scale (CRS) and variable return to scale (VRS). For this purpose, two outputs representing total loans and total interest income, and three inputs representing total deposits, the number of employees and total expenses are selected for seven-years (2006-2012) period in the analysis. The findings under CRS model identify four banks to be fully efficient in the year 2006, two banks in 2007 and one bank in 2008, 2009, 2010, 2011 and 2012, while VRS model results identify five banks to be fully efficient in the year 2006 and 2012, three banks in 2007 and two banks in 2008 and 2009, one bank 2010 and 2011. Four banks, Standard Charted bank, National Commercial Bank (NBC), Citibank and Barclays bank are found to be the most efficiency banks in Tanzania, which serve as the benchmark peers for inefficient banks in the sample, In addition Tobit regression has been used to determine the efficiency drivers.

Financial efficiency of commercial banks listed in Egyptian stock exchange using data envelopment analysis

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mahmoud Abdelrahman Kamel ◽  
Mohamed El-Sayed Mousa ◽  
Randa Mohamed Hamdy
Keyword(s):  
Data Envelopment Analysis ◽  
Commercial Banks ◽  
Stock Exchange ◽  
Malmquist Productivity Index ◽  
Productivity Index ◽  
Data Envelopment ◽  
Tobit Regression ◽  
Financial Efficiency ◽  
Content Type ◽  
Egyptian Stock Exchange

PurposeThis study used data envelopment analysis (DEA) models to measure financial efficiency of twelve commercial banks listed in the Egyptian stock exchange (CBLSE), along with evaluating changes to the financial efficiency during the period 2017–2019.Design/methodology/approachThe study used BCC-I, cross-efficiency, super-efficiency models, and Malmquist productivity index (MPI) to assess financial efficiency of the examined banks. The available data from both inputs and outputs were analyzed using R. studio V.I.3. 1056 software.FindingsOut of twelve banks examined, only four banks were efficient under BCC-I model over different years of the study period; however, only one bank (CIB) appeared to be the most efficient compared to other peers in the study sample. Moreover, MPI results revealed decreased financial efficiency during the study period, due to the decreased technological innovation, except for HDB. Tobit regression results confirmed that total assets and total equity are significant factors impacted financial efficiency of CBLSE.Practical implicationsThis study sheds light on the importance of evaluating financial efficiency of CBLSE to all stakeholders, to pinpoint weaknesses in banks' performance, and for evaluating financial policies and investment decisions.Originality/valueSeveral studies sought to implement different models of DEA to assess banking performance in different regions of the world, but very few studies examined financial efficiency of banks. To the best of authors’ knowledge, this study is one of those few that addressed financial efficiency of banks in Egypt.

Revenue efficiency evaluation of life insurance companies in India: identification of leaders and laggards

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Aparna Bhatia ◽  
Megha Mahendru
Keyword(s):  
Life Insurance ◽  
Empirical Work ◽  
Insurance Companies ◽  
Data Envelopment ◽  
Data Set ◽  
Content Type ◽  
Insurance Sector ◽  
Efficiency Performance ◽  
Revenue Efficiency ◽  
Indian Insurance

PurposeThe purpose of this article is to evaluate revenue efficiency performance of life insurance companies in India. The study also compares if private or public insurance sector is more “revenue efficient”. Furthermore, the study determines the nature of return to scale (RTS) and identifies the leaders and laggards amongst insurance companies operating in India.Design/methodology/approachRevenue efficiency is calculated by employing data envelopment analysis – a non-parametric approach, on a data set of 24 insurance companies over the period 2013–2014 to 2017–2018.FindingsThe empirical results suggest that life insurance companies in India could generate only 34.4% of revenue, which is very less than what these are expected to generate from the same inputs. Majority of life insurance companies operating in India are operating at decreasing return to scale (DRS). There is a reduction in leaders and the highest proportion of companies is falling in the category of laggards.Originality/valueAs per the best knowledge of researchers, no empirical work has been carried out with respect to measuring the revenue efficiency of Indian insurance companies. The current study appropriately fills the gap by not only calculating the revenue efficiency scores of insurance companies in India but also provides insights into the causes of revenue inefficiencies. It also gives implications for efficient and effective management of insurance companies.

Exploring comparative efficiency and determinants of efficiency for major world airlines

2014 ◽  
Vol 21 (4) ◽  
pp. 675-687 ◽  
Author(s):  
Seong-Jong Joo ◽  
Karen L. Fowler
Keyword(s):  
North America ◽  
Technical Efficiency ◽  
Relative Efficiency ◽  
Design Methodology ◽  
Data Envelopment ◽  
Tobit Regression ◽  
Content Type ◽  
Comparative Efficiency ◽  
Major Airlines ◽  
Tobit Regression Analysis

Purpose – For strategic and competitive insights, this paper aims to measure and benchmark comparative operating efficiencies of major airlines in Asia, Europe, and North America. Design/methodology/approach – The authors employ data envelopment analysis for measuring the relative efficiency of 90 airlines in Asia, Europe, and North America. In addition, the authors use Tobit regression analysis for finding determinants of the efficiency. Findings – Results indicate that the efficiency of the airlines in Europe is the lowest among the airlines in these three regions. Efficiency differences between the airlines in Europe and the airlines in the two other regions (Asia and North America) are statistically significant in terms of technical efficiency and pure technical efficiency, but not significant between the airlines in Asia and North America. For the determinants of efficiency, the authors identified that revenues and expenses were significant for explaining efficiency scores of airlines. Research limitations/implications – Further research is needed to explain the findings that airlines in Europe were less efficient than airlines in Asia and North America. In addition, including variables on customer satisfaction in a future study is desirable. Originality/value – Major contributions of this study include measuring the comparative efficiency of major airlines in Asia, Europe, and North America and finding determinants of the efficiency for strategic insights.

Efficiency, internationalization and market positioning in textiles fast fashion

2016 ◽  
Vol 44 (4) ◽  
pp. 397-425 ◽  
Author(s):  
Justo de Jorge Moreno ◽  
Oscar Rojas Carrasco
Keyword(s):  
Design Methodology ◽  
Data Envelopment ◽  
Tobit Regression ◽  
Fast Fashion ◽  
Market Positioning ◽  
Content Type ◽  
The Individual ◽  
Secondary Information ◽  
Good Vision

Purpose – The purpose of this paper is to investigate the competitive position of the company Inditex in the period 1990-2013 as a case study, identified by academics and professionals as a successful company. The analysis has focussed on the comparison of Inditex with its competitive environment. Design/methodology/approach – The methodology used to achieve the objectives was: data envelopment analysis for the analysis of efficiency and for the second the Tobit regression to determine the factors explaining efficiency. The authors have used additional methodologies such as social networks or cluster analysis. Findings – The individual company analysis reveals that the average efficiency level by years for the period 1990-2013, is relatively high 88.8 percent. The determinants of efficiency have been; the resources of the company in terms of assets whose relationship with is U-shaped curvilinear, where the minimum value (trend change) is produced between years 2002 and 2003. The degree of internationalization of the firm, is positively related to efficiency. As the company increases its expansion, experience and skills, increases efficiency. Finally, the effect of liberalization of textile trade in 2005 had no influence on the efficiency levels. Research limitations/implications – The limitations involving the methodology, in terms of representativeness, possible generalizations and type of secondary information used, can be offset by the ability to provide good vision and establish alternatives for possible studies. Originality/value – This paper contributes to the fast-fashion retail industry literature by emphasizing the importance of the case study.

Logistics firms performance: efficiency and effectiveness perspectives

2015 ◽  
Vol 64 (5) ◽  
pp. 686-701 ◽  
Author(s):  
Wai Peng Wong ◽  
Keng Lin Soh ◽  
Chu Le Chong ◽  
Noorliza Karia
Keyword(s):  
Design Methodology ◽  
Small Firms ◽  
Data Envelopment ◽  
Tobit Regression ◽  
Improve Performance ◽  
Managerial Decision ◽  
Managerial Decision Making ◽  
Content Type ◽  
Efficiency And Effectiveness ◽  
And Performance

Purpose – The purpose of this paper is to assess the efficiency, effectiveness and performance of logistics companies in Singapore and Malaysia which are the growing logistics hubs in Asia by using a triangular data envelopment analysis (DEA). It also identifies various factors that significantly affect the efficiency, effectiveness and performance of the Singaporean and Malaysian logistics companies and proposes ways to improve their competitiveness. Design/methodology/approach – First, this study employs a triangular DEA to evaluate the efficiency and effectiveness of the companies. Second, Tobit regression is used to explore the factors that affect logistics performance. Third, the managerial decision-making matrix is addressed and suggestions made to help logistics managers improve performance. Findings – The results reveal that small firms, on average have more potential than the large ones. The results also demonstrate that investment influences firm performance significantly. Originality/value – This paper is the first attempt to apply a triangular DEA-based approach by decomposing performance into efficiency and effectiveness for logistics companies in Singapore and Malaysia.

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