Determinants of bank technical efficiency: Evidence from commercial banks in Ethiopia

The main objective of this study is to examine the determinants of the technical efficiency of commercial banks in Ethiopia over the period from 2011 to 2014. For this purpose, the study used secondary data from the annual reports of the commercial banks in Ethiopia under study. To estimate the tech...

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Autor principal:	Tadesse Zenebe Lema
Formato:	article
Lenguaje:	EN
Publicado:	Taylor & Francis Group 2017
Materias:	technical efficiency intermediation approach data envelopment analysis tobit model commercial banks in ethiopia Business HF5001-6182 Management. Industrial management HD28-70
Acceso en línea:	https://doaj.org/article/1391d507a9b74577bf14a1cc163ba580
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spelling	oai:doaj.org-article:1391d507a9b74577bf14a1cc163ba5802021-12-02T14:35:46ZDeterminants of bank technical efficiency: Evidence from commercial banks in Ethiopia2331-197510.1080/23311975.2016.1268356https://doaj.org/article/1391d507a9b74577bf14a1cc163ba5802017-01-01T00:00:00Zhttp://dx.doi.org/10.1080/23311975.2016.1268356https://doaj.org/toc/2331-1975The main objective of this study is to examine the determinants of the technical efficiency of commercial banks in Ethiopia over the period from 2011 to 2014. For this purpose, the study used secondary data from the annual reports of the commercial banks in Ethiopia under study. To estimate the technical efficiency score DEA was employed on input variables (interest expense, operating expense and deposit) and output variables (interest income, non-interest income and loan). The estimated technical efficiency score indicated that, Under the constant returns to scale assumption Abay bank, Construction and Business bank and Cooperative bank of Oromia are found to be less efficient, while Nib international bank and Oromia international bank are found to be more efficient. Under the variables returns to scale assumption Construction and Business bank, Abay bank and Cooperative bank of Oromia are found to be less efficient while Oromia international bank, Awash international bank and Wegagen bank are found to be more efficient. It is also confirmed that Oromia international bank and Nib international bank are the most scale efficient commercial banks in Ethiopia compared to the commercial banks incorporated in the study while Berhan international bank and Awash international bank are the least scale efficient banks. A Tobit model is used to examine the determinants of technical efficiency. Accordingly, it is found that level of capitalization, liquidity risk, return on asset and market share are found to have positive and significant effect on the technical efficiency score.Tadesse Zenebe LemaTaylor & Francis Grouparticletechnical efficiencyintermediation approachdata envelopment analysistobit modelcommercial banks in ethiopiaBusinessHF5001-6182Management. Industrial managementHD28-70ENCogent Business & Management, Vol 4, Iss 1 (2017)
institution	DOAJ
collection	DOAJ
language	EN
topic	technical efficiency intermediation approach data envelopment analysis tobit model commercial banks in ethiopia Business HF5001-6182 Management. Industrial management HD28-70
spellingShingle	technical efficiency intermediation approach data envelopment analysis tobit model commercial banks in ethiopia Business HF5001-6182 Management. Industrial management HD28-70 Tadesse Zenebe Lema Determinants of bank technical efficiency: Evidence from commercial banks in Ethiopia
description	The main objective of this study is to examine the determinants of the technical efficiency of commercial banks in Ethiopia over the period from 2011 to 2014. For this purpose, the study used secondary data from the annual reports of the commercial banks in Ethiopia under study. To estimate the technical efficiency score DEA was employed on input variables (interest expense, operating expense and deposit) and output variables (interest income, non-interest income and loan). The estimated technical efficiency score indicated that, Under the constant returns to scale assumption Abay bank, Construction and Business bank and Cooperative bank of Oromia are found to be less efficient, while Nib international bank and Oromia international bank are found to be more efficient. Under the variables returns to scale assumption Construction and Business bank, Abay bank and Cooperative bank of Oromia are found to be less efficient while Oromia international bank, Awash international bank and Wegagen bank are found to be more efficient. It is also confirmed that Oromia international bank and Nib international bank are the most scale efficient commercial banks in Ethiopia compared to the commercial banks incorporated in the study while Berhan international bank and Awash international bank are the least scale efficient banks. A Tobit model is used to examine the determinants of technical efficiency. Accordingly, it is found that level of capitalization, liquidity risk, return on asset and market share are found to have positive and significant effect on the technical efficiency score.
format	article
author	Tadesse Zenebe Lema
author_facet	Tadesse Zenebe Lema
author_sort	Tadesse Zenebe Lema
title	Determinants of bank technical efficiency: Evidence from commercial banks in Ethiopia
title_short	Determinants of bank technical efficiency: Evidence from commercial banks in Ethiopia
title_full	Determinants of bank technical efficiency: Evidence from commercial banks in Ethiopia
title_fullStr	Determinants of bank technical efficiency: Evidence from commercial banks in Ethiopia
title_full_unstemmed	Determinants of bank technical efficiency: Evidence from commercial banks in Ethiopia
title_sort	determinants of bank technical efficiency: evidence from commercial banks in ethiopia
publisher	Taylor & Francis Group
publishDate	2017
url	https://doaj.org/article/1391d507a9b74577bf14a1cc163ba580
work_keys_str_mv	AT tadessezenebelema determinantsofbanktechnicalefficiencyevidencefromcommercialbanksinethiopia
_version_	1718391056231301120

Determinants of bank technical efficiency: Evidence from commercial banks in Ethiopia

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