Technical and Scale Efficiency of Commercial Banks in Nigeria
The IUP Journal of Applied Economics, Vol. IX, No. 4, pp. 59-68, October 2010
Posted: 4 Dec 2010
Date Written: October 2010
This study uses a multistage Data Envelopment Analysis (DEA) to estimate the productive efficiency of commercial banks in Nigeria. Thirteen banks with detailed information required were selected for the purpose. Three types of efficiencies were estimated and it was found that about 25% of the banks were inefficient due to excessive use of some of the inputs despite mergers and acquisitions. It was further discovered that environmental variables, like intermediation ratio and market power, positively affect the productive efficiency of the banks.
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