TY - UNPB

T1 - Estimating and analysing the cost efficiency of Greek cooperative banks: an application of two-stage data envelopment analysis

AU - Pasiouras, F

AU - Sifodaskalakis, E

AU - Zopounidis, C

N1 - This working paper is produced for discussion purposes only. The papers are expected to be published in due course, in revised form and should not be quoted without the author’s permission.

PY - 2007/12/19

Y1 - 2007/12/19

N2 - We follow a two-stage procedure to examine for the first time the cost efficiency of
Greek cooperative banks. Our sample consists of 16 banks over the period 2000-2004.
We first use data envelopment analysis (DEA) to estimate the technical, allocative
and cost efficiency for each bank in sample. Then, we use Tobit regression to
determine the impact of internal and external factors on banks’ efficiency. The results of DEA indicate that Greek cooperative banks could improve their cost efficiency by
17.7% on average as well as that the dominant source of cost inefficiency is allocative rather than technical. The results of Tobit regression indicate that size has a positive
impact on all measures of efficiency. However, the impact of capitalization, branches and ATMs depends on the efficiency measure and whether we control for market
conditions or not. GDP per capita has a negative and significant impact on all
measures of efficiency, while unemployment rate has also a negative and significant
impact on technical and cost efficiency although not on allocative efficiency. Finally, banks operating in regions with higher disposal income of households in relation to the total disposal income of households in Greece are more efficient in terms of allocative and cost efficiency.

AB - We follow a two-stage procedure to examine for the first time the cost efficiency of
Greek cooperative banks. Our sample consists of 16 banks over the period 2000-2004.
We first use data envelopment analysis (DEA) to estimate the technical, allocative
and cost efficiency for each bank in sample. Then, we use Tobit regression to
determine the impact of internal and external factors on banks’ efficiency. The results of DEA indicate that Greek cooperative banks could improve their cost efficiency by
17.7% on average as well as that the dominant source of cost inefficiency is allocative rather than technical. The results of Tobit regression indicate that size has a positive
impact on all measures of efficiency. However, the impact of capitalization, branches and ATMs depends on the efficiency measure and whether we control for market
conditions or not. GDP per capita has a negative and significant impact on all
measures of efficiency, while unemployment rate has also a negative and significant
impact on technical and cost efficiency although not on allocative efficiency. Finally, banks operating in regions with higher disposal income of households in relation to the total disposal income of households in Greece are more efficient in terms of allocative and cost efficiency.

KW - Efficience

KW - Cooperative

KW - Data envelope analysis

KW - Tobit Regression

KW - Banking

UR - http://www.bath.ac.uk/management/research/papers.html

M3 - Working paper

BT - Estimating and analysing the cost efficiency of Greek cooperative banks: an application of two-stage data envelopment analysis

CY - Bath

ER -