Measuring Bank Branch Performance Using Data Envelopment Analysis (DEA): The Case of Turkish Bank Branches

African Journal of Business Management, 5(3), 889–901. DOI: 10.5897/AJBM10.584

13 Pages Posted: 26 Apr 2013

Date Written: February 4, 2011

Abstract

The aim of this study is to develop a performance model for measuring the relative efficiency and potential improvement capabilities of bank branches by identifying their strengths and weaknesses. Another purpose is to investigate the production and profitability aspects of branches. Under both production and profitability approaches, efficiency characteristics of branches, which are grouped according to different sizes and regions, have similar tendencies. In both analyses, it is apparent that branch size and scale efficiency are related to each other. As branch size increases scale efficiency increases too and after the most productive scale size, however, as size increases efficiency decreases. Too small and too large branches need special attention. Putting production and profit efficiency scores on two scales reveals the performing characteristics of branches. Each region needs different handling. Branches with low production-low profit efficiency should be evolved towards high production-high profit efficiency region.

Keywords: Data envelopment analysis, bank branch performance, efficiency, technical efficiency, pure technical efficiency, scale efficiency

JEL Classification: C14, C61, G21

Suggested Citation

Eken, Mehmet Hasan and Kale, Süleyman, Measuring Bank Branch Performance Using Data Envelopment Analysis (DEA): The Case of Turkish Bank Branches (February 4, 2011). African Journal of Business Management, 5(3), 889–901. DOI: 10.5897/AJBM10.584 , Available at SSRN: https://ssrn.com/abstract=2256745

Mehmet Hasan Eken (Contact Author)

TEMAR ( email )

Kosuyolu Mahallesi, Ismailpasa sokak, Kadikoy
Istanbul, 111111
Turkey

Süleyman Kale

Kırklareli University ( email )

Kepirtepe Mevkii
Lüleburgaz
Kırklareli, 39750
Turkey

HOME PAGE: http://personel.klu.edu.tr/suleymankale

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