Bank efficiency and non-performing loans: Evidence from Turkey

By Elmira Partovi, Roman Matousek. Research In International Business and Finance, 2019

128 citations recorded by the source corpus.

This study analyses technical and allocative efficiencies in Turkish banks from December 2002 to December 2017, under the assumption of constant returns to scale. We apply a modified version of the Data Envelopment Analysis (DEA) approach introduced by Aparico et al. (2015), which employs a directional distance model to provide estimates of efficiency, with a focus on Non-Performing Loans (NPLs) as an undesirable output. In addition, we examine the determinants of efficiency by applying quantile regressions to panel data. The results obtained support the thesis that NPLs exert a negative impact in terms of technical efficiency, which confirms the “bad management” hypothesis in the banking sector. We also find that the level of efficiency of Turkish banks differs, depending on the ownership structure in place.

Subfields: Accounting, Finance, Management Science and Operations Research

View Paper: https://www.semanticscholar.org/paper/e514742c87f458a5361f575e5c52a9edd8817cb9

How researchers see this paper

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

In Accounting

1. Hakimi Abdelaziz
2. Boussaada Rim
3. Hamdi Helmi

In Finance

1. Hakimi Abdelaziz
2. Boussaada Rim
3. Hamdi Helmi

Citations in the corpus

• The Interactional Relationships Between Credit Risk, Liquidity Risk and Bank Profitability in MENA Region (2020, background): “However, several studies have looked into bank credit or liquidity risks separately (Chen et al., 2018; Hakimi & Zaghdoudi, 2017; Hamdi & Hakimi, 2019; Partovi & Matousek, 2019).”