The technical efficiency of the Japanese banks : non-radial directional performance measurement with undesirable output

By Carlos Pestana Barros, Shunsuke Managi, Roman Matousek. 2012

367 citations recorded by the source corpus.

The paper analyses technical efficiency of the Japanese banks from 2000 to 2007. The estimation technique is based on the Russell directional distance function that takes into consideration not only desirable outputs but also an undesirable output that is represented by non-performing loans (NPLs). The results indicate that NPLs remain a significant burden as for banks' performance. We show that banks' inputs have to be utilised more efficiently, particularly labour and premises. We also argue that a further restructuring process is needed in the segment of Regional Banks. We conclude that the Japanese banking system is still far away from being fully consolidated and restructured.

Subfields: Economics and Econometrics, Finance, Management Science and Operations Research

View Paper: https://www.semanticscholar.org/paper/ce3c81f798d12f91f529dadf69bb68776b2c6cf4

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

1. Peng Zhou
2. Dequn Zhou
3. Hui Wang
4. Limin Du
5. Aoife Hanley
6. Chu Wei
7. Beng Wah Ang
8. Ning Zhang

In Finance

1. Peng Zhou
2. Limin Du
3. Aoife Hanley
4. Chu Wei
5. Esteban Lafuente
6. Mircea Epure
7. Hidemichi Fujii
8. Hui Wang

In Management Science and Operations Research

1. Peng Zhou
2. Dequn Zhou
3. Hui Wang
4. Limin Du
5. Aoife Hanley
6. Chu Wei
7. Beng Wah Ang
8. Ning Zhang

Citations in the corpus

• Indian bank efficiency and productivity changes with undesirable outputs: A disaggregated approach (2013, methodology): “We apply the weighted Russell directional distance model (WRDDM) to measure productive inefficiency using production technology following Chen et al. (2011) and Barros et al. (2012).”
• Energy and CO2 emission performance in electricity generation: A non-radial directional distance function approach (2012, methodology): “(2011) and Barros et al. (2012) define the directional slacks-based inefficiency measures by incorporating undesirable”
• Scenario-based energy efficiency and productivity in China: A non-radial directional distance function analysis (2013, background): “Fukuyama et al. (2011) and Barros et al. (2012) conduct further investigation on how to derive non-radial directional distance efficiency measure in the presence of undesirable outputs.”
• Estimating the marginal abatement cost curve of CO2 emissions in China: Provincial panel data analysis (2015, methodology): “The first research strand uses non-radial directional distance functions to incorporate slacks into the efficiency measure (Barros et al., 2012; Färe and Grosskopf, 2010; Zhang and Choi, 2013b; Zhou et al., 2012).”
• Energy efficiency, carbon emission performance, and technology gaps: Evidence from CDM project investment (2018, background): “…the non-radial directional distance function not only can both increase desirable outputs and reduce undesirable outputs (Chiu et al., 2013; Barros et al., 2012; Kuosmanen and Johnson, 2017), but also takes into account non-zero slack variables so as to improve the precision of energy…”
• Environmental Policy Design, Innovation And Efficiency Gains In Electricity Generation (2017, neutral): “(2011) and Barros et al. (2012). In this model, countries are compared to the most efficient ones in terms of inputs used and good and bad outputs produced.”