scholarly journals Measuring banking efficiency in Vietnam: parametric and non-parametric methods

2019 ◽  
Vol 14 (1) ◽  
pp. 55-64 ◽  
Author(s):  
Loan Thi Vu ◽  
Nga Thu Nguyen ◽  
Linh Hong Dinh
Keyword(s):  
Commercial Banks ◽  
Stochastic Frontier Analysis ◽  
Positive Impact ◽  
Parametric Method ◽  
State Ownership ◽  
Tobit Regression ◽  
Banking Efficiency ◽  
Frontier Analysis ◽  
The Impact ◽  
Non Parametric

The article aims to evaluate the business efficiency of commercial banks in Vietnam using both parametric and non-parametric approaches. In this study, the Stochastic Frontier Analysis (SFA), which belongs to a parametric method, and Data Envelopment Analysis (DEA), a non-parametric approach, are applied to a sample of 30 joint stock commercial banks in Vietnam in the period of 2011–2015. Applying Tobit regression model, the impact of bank size, bank age, and the ownership feature on the efficiency of bank service industry in Vietnam is also investigated. The analysis results show that in general, the Vietnamese banking efficiency is improving during the selected period regardless of techniques used. However, there is small level of similarity in efficiency rankings identified from the SFA and DEA models. In terms of efficiency determinants, the results show that all three variables of size, age, and state ownership have a positive impact on bank efficiency.

scholarly journals A Novel Hybrid Parametric and Non-Parametric Optimisation Model for Average Technical Efficiency Assessment in Public Hospitals during and Post-COVID-19 Pandemic

2021 ◽  
Vol 9 (1) ◽  
pp. 7
Author(s):  
Mirpouya Mirmozaffari ◽  
Reza Yazdani ◽  
Elham Shadkam ◽  
Seyed Mohammad Khalili ◽  
Leyla Sadat Tavassoli ◽  
...  
Keyword(s):  
Technical Efficiency ◽  
Financial Stability ◽  
Stochastic Frontier Analysis ◽  
Parametric Method ◽  
Stochastic Frontier ◽  
Integrated Approach ◽  
Public Hospitals ◽  
Statistical Testing ◽  
Frontier Analysis ◽  
Non Parametric

The COVID-19 pandemic has had a significant impact on hospitals and healthcare systems around the world. The cost of business disruption combined with lingering COVID-19 costs has placed many public hospitals on a course to insolvency. To quickly return to financial stability, hospitals should implement efficiency measure. An average technical efficiency (ATE) model made up of data envelopment analysis (DEA) and stochastic frontier analysis (SFA) for assessing efficiency in public hospitals during and after the COVID-19 pandemic is offered. The DEA method is a non-parametric method that requires no information other than the input and output quantities. SFA is a parametric method that considers stochastic noise in data and allows statistical testing of hypotheses about production structure and degree of inefficiency. The rationale for using these two competing approaches is to balance each method’s strengths, weaknesses and introduce a novel integrated approach. To show the applicability and efficacy of the proposed hybrid VRS-CRS-SFA (VCS) model, a case study is presented.

scholarly journals The Impact of Corporate Social Responsibility as a Marketing Investment on Firms’ Performance: A Risk-Oriented Approach

2021 ◽  
Vol 14 (11) ◽  
pp. 515
Author(s):  
Mohamed Ibrahim ◽  
Mohamed El Frargy ◽  
Khaled Hussainey
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Banking Sector ◽  
Stochastic Frontier Analysis ◽  
Positive Impact ◽  
Frontier Analysis ◽  
Strategic Commitment ◽  
Corporate Social ◽  
The Impact

In light of the growing interest in corporate social responsibility (CSR), there is still controversy regarding its impact on firms’ performance. In this paper, we examine the impact of CSR initiatives, as a marketing investment, on firms’ performance. We treat CSR initiatives as investment and, consequently, the returns appear over the long term. We use the stochastic frontier analysis (SFA) approach which is a forward-looking financial market-based metric that captures the firm’s long-term performance. We focus on the banking industry as it confronts a variety compound of risk. We find that CSR implementation is positively reflected in profit efficiency, regardless of the strategic commitment to implementing CSR and bank size, as these variables do not influence the CSR–performance relationship. However, we find that bank age and competitive positioning have a significant impact on the CSR–performance relationship. Our study provides valuable insights to CSR practitioners and researchers, especially in the banking sector. We provide empirical evidence on the importance of CSR and its positive impact on bank performance in Egypt as one of the emerging markets.

scholarly journals Estimation of technical efficiency of Czech farms operating in less favoured areas

2019 ◽  
Vol 65 (No. 10) ◽  
pp. 445-453
Author(s):  
Tamara Rudinskaya ◽  
Tomas Hlavsa ◽  
Martin Hruska
Keyword(s):  
Technical Efficiency ◽  
Stochastic Frontier Analysis ◽  
Positive Impact ◽  
Stochastic Frontier ◽  
Agricultural Area ◽  
Farm Size ◽  
Identification System ◽  
Accounting Data ◽  
Frontier Analysis ◽  
The Impact

This paper deals with the technical efficiency analysis of farms in the Czech Republic. The empirical analysis provides an evaluation of technical efficiency with regard to the farm size, farm specialisation, and farm location. Accounting data of Czech farms from the Albertina database for the years 2011–2015 were used for the analysis. The data were classified by the utilised agricultural area and location of the farm expressed as a less favoured area type from the Land Parcel Identification System (LPIS) database. Research was conducted using the translogarithmic production function and Stochastic Frontier Analysis. The results indicate positive impact of farm size, expressed by utilised agricultural area, on technical efficiency. The analysis of the impact of farm specialisation on technical efficiency verified that farms specialised on animal production are more efficient. The lowest technical efficiency is shown by farms situated in mountainous Less Favoured Areas (LFAs), the highest technical efficiency by farms located in non-LFA regions.

Does Country Risk Affect Banking Efficiency: Empirical Evidence from Turkey and Selected Countries from the European Union

2020 ◽  
pp. 097215092093397
Author(s):  
Anwar Al-Gasaymeh ◽  
Miral R. Samarah
Keyword(s):  
European Union ◽  
Banking Sector ◽  
Stochastic Frontier Analysis ◽  
Generalized Method Of Moments ◽  
Country Risk ◽  
The European Union ◽  
Banking Efficiency ◽  
Frontier Analysis ◽  
The Impact ◽  
The Eu

This study explores the readiness of the Turkish banking sector for its accession to the European Union (EU). Obviously, the job is not finished yet, with the challenges of introducing country risk variables and their impact on banking efficiency. Although efficiency analysis remains an important issue in economic studies to answer whether the Turkish banking sector is ready for the accession to the EU. Therefore, this study aims to investigate the impact of country risk levels on banking efficiency in Turkey and the EU in recent years, using stochastic frontier analysis for a parametric technique for the period 2010–2018. In the second stage, efficiency measures are used to investigate the effect of country risk and macroeconomic variables, applying the generalized method of moments. The results suggest that the banking sector operating in a country with low risk tends to perform more efficiently.

scholarly journals Evaluation and investigation: the determinants of central banking efficiency

2021 ◽  
Vol 55 (2) ◽  
pp. 481-493
Author(s):  
Qaiser Farooq Dar ◽  
Ahn Young-Hyo ◽  
Gulbadin Farooq Dar
Keyword(s):  
Economic Growth ◽  
International Trade ◽  
Central Bank ◽  
Structural Equation ◽  
Stochastic Frontier Analysis ◽  
Positive Impact ◽  
Central Banking ◽  
Bank Efficiency ◽  
Frontier Analysis ◽  
The Impact

The stochastic frontier analysis is a comprehensive and accepted approach for analysing efficiency in case of the parametric functional relationship existing between production processes’ inputs with its output. Usually, in the banking industry, the relationship between the user inputs and outputs are non-deterministic. In the present study, an SFA approach is used to estimate the efficiency of top 17 Asian central banks in combining three inputs and one output. Structural equation modelling is applied to examine the impact of the country’s international trade and economic growth on its central bank efficiency. Based on the results, we have observed significant efficiency ranks between the year 2016– 2018. The technical efficiency value estimates by SFA method range from 0.236822 to 0.821864. Our calculations also suggest a positive impact of international trade on central bank efficiency compared to the economic growth of that country.

scholarly journals Efficiency of European Airports: Parametric Versus Non-parametric Approach

2021 ◽  
Vol 12 (1) ◽  
pp. 1-14
Author(s):  
Marketa Matulova ◽  
Jana Rejentova
Keyword(s):  
Normal Distribution ◽  
Stochastic Frontier Analysis ◽  
Parametric Method ◽  
Stochastic Frontier ◽  
Efficiency Score ◽  
Evaluation Procedure ◽  
Frontier Analysis ◽  
Single Output ◽  
Dea Models ◽  
Non Parametric

This paper presents a performance evaluation of European airports, based on the application of both parametric and non-parametric approaches. We have evaluated the 115 busiest airports in Europe according to the number of passengers checked-in in 2018. The four inputs we used were the number of Terminals, Runways, Boarding gates, and Aircraft stands. Three variables were used to describe the outputs, namely, Passengers, Movements, and Cargo. The parametric method we chose to apply was the Stochastic Frontier Analysis (SFA) with the Cobb-Douglas production function, the Half-Normal distribution of inefficiency component, and the Normal distribution of an error term. As a basic SFA model only allows for a single output, we employed different methods to get a single efficiency score for each and every airport. Next, we evaluated the airport performance non-parametrically using several Data Envelope Analysis (DEA) models including the super-efficiency model. We compared the results obtained by individual approaches and discussed their pros and cons. Finally, we applied the program evaluation procedure to explore the effect of the different forms of airports ownership on their performance.

scholarly journals Review of Modern Approaches for Assessing the Effectiveness of Banking

2021 ◽  
Vol 20 (2) ◽  
pp. 294-326
Author(s):  
M. V. Leonov ◽  
Keyword(s):  
Value Chain ◽  
Commercial Banks ◽  
Business Models ◽  
Stochastic Frontier Analysis ◽  
Parametric Method ◽  
Banking Regulation ◽  
Practical Significance ◽  
Production Factor ◽  
Scientific Publications ◽  
Frontier Analysis

In the current circumstances of digital transformation of the economy, the study of the efficiency of commercial banks is widely demanded and provides an opportunity for identifying the prerequisites for the formation of a sustainable financial system. Despite the large number of scientific publications in this field, there are no systematic studies that summarize the existing methodological framework for the study of the effectiveness of banking activities. The purpose of the article is to critically analyze the approaches to assessing the efficiency of banking activities and prospects for its improvement in the digital economy. The complexity of assessing the effectiveness of commercial banks consists in the multiplicity of forms of output and resources used for this process. In this study, the author puts forward a hypothesis that the implementation of modern approaches and methods to assess the effectiveness of banking activities can improve the accuracy of the assessment itself, and help identify factors that increase the effectiveness of such activities. The article is based on English-language scientific papers published in between 2016 and 2020 and indexed in the international scientometric database «Web of Science». The author applies the method of systematic bibliographic study of the set of publications, highlights the main discussion issues of the recent years, namely, research methodology, internal efficiency factors, country specifics of banking activities. The article reveals the content, certain issues, and the limits of the applicability of the nonparametric method of data envelopment analysis and the parametric method of stochastic frontier analysis in assessing the effectiveness of activities. Particular attention is paid to the generalization of research results in terms of identifying factors that have a significant impact on the effectiveness of commercial banks: ownership structure, returns to scale, regulation. The author highlights the increasing role of information technology as a key production factor, highlights the phenomenon of breaking the value chain in banking activities, the formation of new business models and the functioning of banking ecosystems. The scientific and practical significance of the article lies in the gain of knowledge, which might provide the basis for the development of measures to improve banking regulation, as well as serve as the framework for the identification of the most effective forms of banking intermediation.

scholarly journals Strategies to increase production efficiency in Indonesian Sharia commercial banks using Stochastic Frontier Approach (SFA)

2019 ◽  
Vol 21 (3) ◽  
pp. 379 ◽  
Author(s):  
Pratystya Ika Wardhani ◽  
Abdul Mongid
Keyword(s):  
Commercial Banks ◽  
Production Efficiency ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Islamic Banks ◽  
Tobit Regression ◽  
Increase Production Efficiency ◽  
Frontier Analysis ◽  
Asset Quality

The purpose of this research is to examine the right strategy in increasing production efficiency in Sharia commercial banks in Indonesia. This research was conducted in two stages of testing. The first stage is estimating the level of production efficiency of Indonesian Islamic banks in 2010-2017 through the Stochastic Frontier Analysis (SFA) approach. The second stage uses Tobit regression to examine the relationship between the efficiency of production of sharia commercial banks with specific bank characteristics, including; LASSET, CAR, NPF, GCG, NOM and FDR. The results indicate that the level of production efficiency of sharia commercial banks is strongly influenced by several things. From the input side, optimization of DPK, PSC and LC components is needed to maximize production efficiency. This study also found that CAR (solvency performance), NPF (asset quality performance), NOM (profitability performance), and FDR (liquidity performance) greatly influenced variations in the efficiency of Indonesian Islamic banks. Improving the quality of financing supported by an increase in the operational system and the quality of human resources and began to concentrate on revenue sourced from services to be a solution that could be implied by Indonesian Islamic banks.

scholarly journals Technological Innovation, Production Efficiency, and Sustainable Development: A Case Study from Shenzhen in China

2021 ◽  
Vol 13 (19) ◽  
pp. 10827
Author(s):  
Sheng Zhang ◽  
Meng Xu ◽  
Yifu Yang ◽  
Zeyu Song
Keyword(s):  
Sustainable Development ◽  
Technological Innovation ◽  
Socioeconomic Development ◽  
Production Efficiency ◽  
Stochastic Frontier Analysis ◽  
Guangdong Province ◽  
Reform Process ◽  
Tobit Regression ◽  
Frontier Analysis ◽  
The Impact

Shenzhen is a national sustainable development innovation demonstration zone, with the theme of innovation leading the sustainable development of megacities. This manuscript studies technological innovation, production efficiency, and sustainable development and explores the impact of their relationship on Shenzhen. The benchmark test shows a significant negative correlation between the inefficiency of production, labor levels, investment levels, technical levels, and socioeconomic status. From 2001 to 2019, the production efficiencies of 21 prefecture-level cities in Guangdong Province were used as the research object. The Cobb–Douglas production function conducted panel stochastic frontier analysis and TOBIT regression, and the conclusion was robust. The mechanism test found that the economic growth of Guangdong Province, including Shenzhen, is still dominated by labor and investment. Its production efficiency has been dramatically impacted after 2008, and the increase in production inefficiency may be affected by the crowding-out effect of a four-trillion investment. Finally, based on the Tobit regression, we found that the rise in the labor force, capital input, technological level, and socioeconomic development level could reduce Shenzhen’s production inefficiencies by 3.6%, 20.2%, 2.5%, and 4%, respectively. There is still a long way to achieve sustainable development; however, Shenzhen’s technological innovation and mega-city reform process will provide valuable insights for other regions.

Impact of community-based business model and competitive advantage on exports: evidence from diamond industry

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Shubham Kumar ◽  
Deepak Kumar ◽  
Keya Sengupta ◽  
Tapas Kumar Giri
Keyword(s):  
Competitive Advantage ◽  
Business Model ◽  
Value Chain ◽  
Business Models ◽  
Stochastic Frontier Analysis ◽  
Positive Impact ◽  
Community Based ◽  
Content Type ◽  
Frontier Analysis ◽  
The Impact

Purpose This study aims to examine the altering paradigms for two specific characteristics of the international diamond industry: community-based business model and competitive advantage and their impact and interaction effect. Design/methodology/approach This study uses global value chain (GVC) analysis to understand the industry characteristics, social impacts and disruption in the international diamond industry. Further, normalized revealed comparative advantage is used to measure the competitiveness of different countries over time. Finally, stochastic frontier analysis is used to test the impact of the community-based business model and competitiveness on exports and estimate the technical efficiency. Findings The international diamond industry is witnessing changes in the business model, competitiveness, processes, policies and consumer behavior. While competitive advantage and community have a positive impact on exports, the relationship between competitive advantage and exports gets negatively moderated by the community. Further, insights from the GVC analysis indicate that though the industry is facing several disruptions and challenges, it has shown the unique quality of community reconfiguration and relocation. Originality/value This paper provides insights into the diamond industry facing multiple disruptions at various stages of GVC and contributes to the literature on international trade, community-based business models and GVC.

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