The competitiveness and efficiency of the Vietnamese banking sector in the face of financial liberalisation

This thesis provides empirical evidence of the impact of financial liberalisation on the competitiveness and efficiency of the Vietnamese banking sector by applying a combination of non-parametric frontier estimation methods, stochastic frontier methods and Tobit panel data regression techniques. There have been few studies in Vietnam linking financial liberalisation to banking sector competitiveness and efficiency. In the thesis, these parametric and non-parametric methods are applied in a pilot study to measure the allocative efficiency at branch level of the Vietnam Bank for Agricultural and Rural Development (VBARD) – the largest bank in Vietnam in terms of total assets. The technical efficiency of the Vietnamese banking sector at bank level is then estimated using the same methods. The empirical investigation of the thesis is based on the use of branch-level data and bank-level data for a sample of more than 50 branches of VBARD across the country over the period 2004–2008 and around 40 banks over the period 2002–2012. Using data envelopment analysis (DEA) to measure allocative efficiency at branch level and technical efficiency at bank level and using stochastic frontier analysis (SFA) to estimate cost and profit efficiency at branch level, the thesis suggests that the contributions of financial liberalisation to bank efficiency are generally mixed, depending on the measures of bank efficiency used and the sub-periods taken into account. The thesis presents weak empirical evidence of the positive impacts of financial liberalisation on efficiency improvements of the Vietnamese banking sector at both branch and bank level. Banking efficiency is inconsistently increased over the period of financial liberalisation as the financial market is more liberated and the size of the banking sector substantially increased. Hence, industry rationalisation through reconsolidating and restructuring mergers and acquisitions (M&A) is required. The thesis suggests that both financial liberalisation and greater competition contribute to lower profit efficiency and higher costs for banks. The thesis indicates that the Vietnamese banking system is dominated by large banks and that the state-owned commercial banks (SOCBs) are more efficient than the joint stock commercial banks (JSCBs), mainly because of their competitive advantage in terms of size. Furthermore, Vietnamese banking efficiency at both branch and bank levels is significantly improved by high levels of capitalisation, larger size and a better labour force, while it is hampered by low loan quality. The findings also suggest that the northern banks in Vietnam are more efficient than the southern banks. The empirical evidence of the thesis is also focused on investigating the impact of financial liberalisation on bank technical efficiency and productivity growth, making use of a two-step approach consisting of DEA and Tobit panel data regressions. The analysis conducted across the different location groups (north and south) suggests that the impact on the technical efficiency of banks is more pronounced in the northern areas than in the southern areas. Furthermore, the Tobit estimation takes into account bank-specific differences in terms of total assets, the equity–total assets ratio, the labour–capital ratio and the provision–capital ratio; the evidence suggests that these influences are also mostly significant under financial liberalisation. As a result, the thesis suggests that financial liberalisation reinforces an independent impact on the technical efficiency of banks

Nonparametric efficiency and productivity change measurement of banks with corporate social responsibilities : the case for Ghana

This thesis has twofold objectives. The first is to develop a framework based on the existing theory and method of Data Envelopment Analysis (DEA) for measuring performance of financial firms that have the dual goals of profit maximisation and Corporate Social Responsibilities (CSRs). The second is to examine the impact of banking regulatory reforms including bank ownership, specialisation, and capitalisation types on the average efficiency and frontier differences of banking subgroups. The objectives are achieved using the standard DEA, the metafrontier analysis and the global frontier differences (GFD). DEA can handle multidimensional inputs and outputs without specifying specific functional forms. CSR is conceptually justified and modelled as an additional output into the banking intermediation approach. Two DEA models, one with CSR and another without CSR are measured and compared. Parametric and nonparametric tests and regressions are utilised to support, empirically, the relevance of CSR in bank performance evaluation. Do foreign banks outperform private-domestic and state banks? Should banks diversify their products or focus in narrow range of products and services? Are listed banks more efficient than non-listed banks? The second part of the thesis contributes to the extant literature by answering these questions using the metafrontier analysis and the GFD to provide new evidence on the effect that the entry of foreign and private-domestic banks, universal banking and listing of banks on the stock market, have on bank performance. Banks are segmented into groups based on their bank-specific attributes and their average efficiencies and bestpractice differences compared. Relevant policy recommendations are drawn from the analysis for both the banking regulator and bank management. The final methodological contribution extends the GFD by defining a further decomposition of the global frontier shift, into components that indicate whether an observation is situated in a more or less favourable location in the production possibility set. Consequently, a four-factor “Newly-decomposed Malmquist productivity change index” is proposed. The index and its decompositions have potentially interesting policy implications, which are illustrated using the empirical data on Ghanaian banks. The index is in the spirit of the standard Malmquist index but the intuition is that some components can be used to draw conclusions about productivity changes for a whole population of firms whilst others determine whether individual firms are in favourable locations and/or moving towards locations that are more favourable over time. More importantly, arguably, a listed, universal or foreign bank can be located in a favourable position and move towards location that is more favourable by virtue of its bank-specific attributes or by contributing more towards CSR. These factors are explored and policy measures prescribed in the final contribution of the thesis

DEA methodologies for assessing the efficiency profiles of commercial banks under heterogeneity conditions

Since the publication of the seminal paper by Charnes, Cooper and Rhodes in 1978, where the conventional CCR model of Data Envelopment Analysis (DEA) has been proposed, DEA as a field has substantially evolved both methodologically and in terms of applications. So far, efficiency and productivity studies in the banking sector proved to be amongst the most popular application areas. The popularity of DEA in this field, amongst others, is due to its unique features such as its non-parametric nature, it benchmarks against the best practice performers rather than the average performers. It allows one to identify targets for improvement; it does not need any functional specification of the relationship between inputs and outputs, and provides a variety of efficiency measures most suitable for a variety of applications. Moreover, it provides a wide range of models to perform analyses at the aggregate level and the detailed level. In addition, DEA models allow one to perform both Static and Dynamic analyses. In this thesis, DEA is used to assess the efficiency profiles of commercial banks under heterogeneity conditions. First, a new DEA-based analysis framework with a regression-based feedback mechanism is proposed to deal with the particular features of the UK banking sector, where regression analysis provides DEA with feedback that informs about the relevance of the inputs and the outputs chosen by the analyst. Unlike previous studies, the DEA models used within the proposed framework could use both inputs and outputs, only inputs, or only outputs, which proved necessary with UK data. Second, to the best of our knowledge, no attempt has been made to investigate the relative efficiency of operating environments of banks. This thesis aims at filling this gap by analysing the efficiency of HSBC in different operating environments or countries over time. The choice of a single bank; namely, HSBC, is motivated by isolating the operating environment effect on efficiency and thus avoiding any bias that would result from the relative efficiency of different banks within the same operating environment. From a methodological perspective, this analysis is performed using a variety of framework; namely, A four-stage analysis is performed with Static black box SBM, Dynamic SBM, Network SBM, and Dynamic-Network SBM DEA frameworks. Overall, this thesis contributes to both the DEA field, through its methodological contributions, and the banking sector, through its application of the methodological contributions in assessing banks’ efficiency profiles

Multiperiod modelling planning and productivity and energy efficient assessment of an industrial gases facility

El creixement de la demanda energètica i el continu desenvolupament tecnològic de la societat estan sobrepassant els límits mediambientals del nostre planeta. Sense les mesures adequades, aquesta situació podria derivar en importants problemes mediambientals que causarien danys irreversibles al medi ambient i al benestar de la humanitat. El sector industrial és el principal consumidor energètic, amb una demanda al voltant d’un terç de la global, un aspecte que té un evident efecte negatiu amb l’impacte mediambiental. Per tant, el repte de mitigar el canvi climàtic implicarà millores en l’ús de la energia a la industria, generant grans oportunitats d’estalvi energètic i reduint el seu impacte mediambiental. En aquest sentit, es essencial obtenir informació derivada de la investigació i l’anàlisi científic que permeti desenvolupar solucions focalitzades en la reducció de costos energètics. Aquesta tesis ha tractat les necessitats particulars de la producció de gasos industrials, creant eines basades en l’optimització matemàtica que permeten una presa de decisions operatives més àgil i efectiva i detectant àrees per la millora energètica. Aquestes eines fomenten i avancen cap a una industria més eficient que permeti un futur més sostenible. Aquesta tesis té dos contribucions principals. D’una banda, s’ha desenvolupat una eina d’optimització multiperiod que permet obtenir la configuració d’operació òptima (des del punt de vista econòmic i energètic) d’un procés de producció de gasos industrials, tenint en compte totes les seves variables. Per altra banda, s’utilitza la metodologia de Data Envelopment Analisis per a comparar diferents unitats de producció de gasos industrials, identificant els focus d’ineficiència i fent recomanacions per a resoldre’ls.El crecimiento de la demanda energética y el continuo desarrollo tecnológico de la sociedad están sobrepasando los límites medioambientales de nuestro planeta. Sin las medidas adecuadas, esta situación puede derivar en importantes problemas medioambientales que podrían causar daños irreversibles al medioambiente y al bienestar de la humanidad. El sector industrial es el principal consumidor energético, consumiendo alrededor de un tercio de la demanda energética global, lo que tiene una evidente relación negativa con el impacto ambiental. Por lo tanto, el reto de mitigar el cambio climático implicará mejoras del uso de la energía en la industria, creando grandes oportunidades de ahorro energético y reduciendo su impacto ambiental. Para ello, es esencial obtener información derivada de la investigación y el análisis científico que permita desarrollar soluciones enfocadas a la reducción de costes energéticos. Esta tesis ha tratado las necesidades particulares de la producción de gases industriales, creando herramientas basadas en la optimización matemática que permiten una toma de decisiones operativas más ágil y efectiva y detectando áreas para la mejora energética. Estas herramientas fomentan y avanzan hacia una industria más eficiente que permita un futuro más sostenible. Esta tesis tiene dos contribuciones principales. Por un lado, se crea una herramienta de optimización multiperiodo que permite obtener la configuración de operación óptima (desde el punto de vista económico y energético) de un proceso de producción de gases industriales, teniendo en cuenta todas sus variables. Por otro lado, se usa la metodología de Data Envelopment Analysis para comparar diferentes unidades de producción de gases industriales, identificando los focos de ineficiencia y haciendo recomendaciones para resolverlos. En definitiva, esta tesis ofrece un conjunto de herramientas prácticas y efectivas que apoyan el proceso de toma de decisiones en actividades industriales y permiten la identificación de oportunidades de mejora energética.The growth of energy demand and the continuous technological development of society are surpassing the environmental limits of our planet. Without adequate measures, this situation can lead to serious environmental problems that could cause irreversible damage to the environment and the well-being of humanity. The industrial sector is the largest energy consumer, with about one-third of global energy demand, which has an evident negative relationship with environmental impact. Therefore, the challenge of mitigating climate change will imply improvements in the energy use in industry, creating great opportunities for energy savings and reducing its environmental impact. In this sense, it is essential to obtain information derived from research and scientific analysis that allows developing solutions focused on the reduction of energy costs. This thesis has dealt with the particular needs of the production of industrial gases, by creating tools based on mathematical optimization models that allow much more agile and effective operational decision-making as well as the detection of areas for energy improvement. These tools encourage and move towards a more efficient industry that allow a more sustainable future. Two main contributions are derived from this thesis. On the one hand, it creates a multiperiod optimization tool that allows obtaining the optimal operational configuration (from the economic and energetic points of view) of an industrial gas manufacturing process, taking into account all the variables that affect the system. On the other hand, the Data Envelopment Analysis methodology is used to compare different industrial gas production units, identifying inefficiency sources and making recommendations to adopt the best practices to solve them. Summarizing, this thesis offers a set of practical and effective tools that support the decision making process in industrial activities and allows the identification of opportunities for energy improvement

Performance Evaluation of Water Services in Italy: A Meta-Frontier Approach Accounting for Regional Heterogeneities

first_pagesettingsOrder Article Reprints Open AccessArticle Performance Evaluation of Water Services in Italy: A Meta-Frontier Approach Accounting for Regional Heterogeneities by Corrado lo StortoORCID Department of Industrial Engineering, University of Naples Federico II, 80125 Naples, Italy Water 2022, 14(18), 2882; https://doi.org/10.3390/w14182882 Received: 22 August 2022 / Revised: 11 September 2022 / Accepted: 13 September 2022 / Published: 15 September 2022 (This article belongs to the Section Water Resources Management, Policy and Governance) Download Browse Figures Versions Notes Abstract Data relative to the water services industry in Italy indicate that there is a serious infrastructure gap between the southern regions and isles and the rest of the country. In these geographical areas, water utilities are provided with substantial public grants from the central and local governments to support investments necessary to mitigate the infrastructure divide by increasing capacity and improve service quality. This paper implements a meta-frontier non-parametric approach based on a data envelopment analysis (DEA) to evaluate the efficiencies of 71 Italian water utilities, accounting for the differentiated contexts in which they operate. A short-term perspective was assumed to estimate efficiency, considering the production factors associated with the infrastructure assets as non-discretionary inputs in the specification of the meta-frontier model. The results showed that water utilities operating in the southern regions and isles suffer from an efficiency gap in comparison to those in the northern and central regions. The average efficiency gap was 9.7%, achieving 24.9% in the worst case. Moreover, a more in-depth analysis focusing on the water utilities in the southern regions and isles indicated that scale inefficiencies might be an important determinant of such an efficiency gap. Indeed, slightly more than 69% of the water utilities operated at increasing returns to scale. Evidence from this study raises concern about the appropriate structure of the Italian water service industry and, particularly, the optimal size of the utilities and the financial sustainability of water services in the southern regions and isles

Efficiency and productivity analysis of global not-for-profit microfinance institutions:data envelopment analysis approach

Microfinance has been regarded as the one of the effective solutions in poverty alleviation efforts globally. Its growth has been driven by not‐for‐profit microfinance institutions in the form of non‐governmental organization, credit unions, cooperatives and others. Microfinance sits at the unique position between social welfare programme and financial institutions as it faces dual objectives of outreach to the poor and financial sustainability. Due to its unique dual objectives, it is imperative to undertake a comprehensive performance and productivity assessment as microfinance institutions currently hold an important roles in improving the lives of the poor globally. This thesis thus has multi‐faceted objectives: firstly, it seeks to propose a comprehensive performance measurement that can evaluate these objectives comprehensively, as opposed to current focus on trade‐offs between microfinance dual objectives and shortsighted focus on financial indicator, yet proficient to track microfinance performance and total factor productivity over time. It therefore proposes Data Envelopment Analysis (DEA) as adept measurement for microfinance institutions globally, especially using hyperbolic, non‐oriented DEA model due to its benchmarking capability and DEA‐based Circular Malmquist Index in measuring total factor productivity under condition of unbalanced data, such as the case with microfinance. This thesis also proposes Social‐Financial Efficiency Matrix as a performance monitoring tool for microfinance. Secondly, this thesis seeks to provide thought‐provoking empirical evidence to the performance comparison between Islamic and conventional microfinance. Thirdly, it seeks to explore the relationship between loan methodology and microfinance efficiency in six different regions globally, in contributing to the search of an adept loan method that can boost efficiency. Fourthly, it seeks to analyse microfinance productivity globally in times of crisis, i.e. evaluating its resilience toward external shocks, so that improvement can be proposed for the future

Essays on the measurement of school efficiency

Measuring school efficiency is a challenging task. First, a performance measurement technique has to be selected. Within Data Envelopment Analysis (DEA), one such technique, alternative models have been developed in order to deal with environmental variables. The majority of these models lead to diverging results. Second, the choice of input and output variables to be included in the efficiency analysis is often dictated by data availability. The choice of the variables remains an issue even when data is available. As a result, the choice of technique, model and variables is probably, and ultimately, a political judgement. Multi-criteria decision analysis methods can help the decision makers to select the most suitable model. The number of selection criteria should remain parsimonious and not be oriented towards the results of the models in order to avoid opportunistic behaviour. The selection criteria should also be backed by the literature or by an expert group. Once the most suitable model is identified, the principle of permanence of methods should be applied in order to avoid a change of practices over time. Within DEA, the two-stage model developed by Ray (1991) is the most convincing model which allows for an environmental adjustment. In this model, an efficiency analysis is conducted with DEA followed by an econometric analysis to explain the efficiency scores. An environmental variable of particular interest, tested in this thesis, consists of the fact that operations are held, for certain schools, on multiple sites. Results show that the fact of being located on more than one site has a negative influence on efficiency. A likely way to solve this negative influence would consist of improving the use of ICT in school management and teaching. Planning new schools should also consider the advantages of being located on a unique site, which allows reaching a critical size in terms of pupils and teachers. The fact that underprivileged pupils perform worse than privileged pupils has been public knowledge since Coleman et al. (1966). As a result, underprivileged pupils have a negative influence on school efficiency. This is confirmed by this thesis for the first time in Switzerland. Several countries have developed priority education policies in order to compensate for the negative impact of disadvantaged socioeconomic status on school performance. These policies have failed. As a result, other actions need to be taken. In order to define these actions, one has to identify the social-class differences which explain why disadvantaged children underperform. Childrearing and literary practices, health characteristics, housing stability and economic security influence pupil achievement. Rather than allocating more resources to schools, policymakers should therefore focus on related social policies. For instance, they could define pre-school, family, health, housing and benefits policies in order to improve the conditions for disadvantaged children

Efficiency analysis of a retail stores chain of fashion & accessories

Mestrado em EconomiaO objetivo deste estudo é a avaliação da eficiência de uma cadeia de lojas de retalho que representa várias marcas internacionais de prestígio no mercado Português e a identificação dos determinantes que influenciam a eficiência. O estudo compara o desempenho das lojas compostas por 3 diferentes marcas do segmento Brand Equity e propõe melhorias no âmbito da melhoria da performance. Para avaliar a eficiência e os seus determinantes a análise é realizada em duas fases: na primeira fase a metodologia Análise Envoltória de Dados (DEA) é usada para determinar os níveis de eficiência e na segunda fase, os resultados obtidos na primeira fase são estimados através de uma regressão linear quantile de forma a determinar os determinantes da eficiência. Os principais resultados revelam que o número de lojas eficientes aumenta quando estamos perante retorno variável à escala e quando a variável renda é inserida no modelo DEA. As marcas e a localização comercial das lojas são os determinantes da eficiência.This study aims to assess efficiency of a retail stores chain of Fashion & Accessories that represents several international prestigious brands in the Portuguese market and to identify the driving forces that influence efficiency. The study compares the performance among the stores of 3 different brands of the Brand equity market and provides insights into ways of improving performance. To evaluate the efficiency and its determinants we use a two-approach methodology: first Data Envelopment Analysis methodology (DEA) is used to determine the efficient scores and then a Quantile linear regression to determine the efficiency drivers. Main results show that the number of efficient stores increase under variable return to scale and when the variable rent is included in the DEA model. The brands and the retail commercial location are the factors that explain efficiency