Efficiency And Productivity Analysis In Turkish Banking Sector With Data Envelopment Analysis And Malmquist Index

Abstract

The aim of this study is to analyze the efficiency and productivity of 3 public, 6 private and 6 foreign deposit banks operating in the Turkish banking sector with the help of data envelopment analysis and Malmquist index.For this purpose, the efficiency of 15 deposit banks operating in the Turkish banking sector between 2014 and 2018 was measured and whether the efficiency of Malmquist productivity index changed over the years. In the study, input-oriented Charnes Cooper and Rhodes (CCR) model was used under the assumption of constant return to scale and 4 input 2 output variables were selected. Inputs in efficiency and productivity measurement are defined as; personnel expenses / total assets (%), total loans / total assets (%), equity / total assets (%), total deposits / total assets (%), outputs are defined as; the earning power of assets (net profit / total assets), the earning power of equity (net profit / equity) (%). The Windows Data Envelopment Analysis Program (Win4Deap) package program was used in the analysis and brokerage approach was adopted. While 4 banks were active under the Constant Return to Scale(CRS) assumption between 2014 and 2018, 8 banks were found active under the assumption of Variable Return to Scale (VRS).Inefficient banks; target values were calculated by slacks movement and radial movement values to their original values and it was found that the lambda values calculated by Win4Deap program and which banks are peers. The changes observed in Malmquist total factor productivity, technical efficiency, technological efficiency, pure efficiency, scale efficiency and total factor productivity were analyzed as a whole and decision-making units experienced improvement in the 2016-2017 period.