Do Bank Deposits Require a Special Treatment: An Analysis of the Efficiency of German Cooperative Banks
25 Pages Posted: 15 Jan 2016
Date Written: January 14, 2016
Banking efficiency has been one of the most often studied subjects since the introduction of Data Envelopment Analysis. However, there is no broadly accepted model specification yet. Recently a new model, particularly addressing the ambiguous role of deposits in banking, has been presented by Holod and Lewis (2011). The objective of this article is to evaluate the applicability of this new model. Analyzing panel data on 1172 German cooperative banks in the period 1991-2009, this article finds the special treatment of deposits to be a valuable amendment to the evaluation of banking efficiency. However, the model of Holod and Lewis (2011) requires assumptions which cannot be made for any market.
Keywords: Bank efficiency, DEA, Input-output models, Cooperative banks
JEL Classification: G21, C67
Suggested Citation: Suggested Citation