The Value-Relevance Of Internet Web Traffic And Revenue On Top Arab Banks Comparative Efficiency Performances

The comparative efficiency performances of the top Middle East Arab banks are measured using Data Envelopment Analysis (DEA) and Principal Components Factor Analysis (PCFA).  Cross-sectional data are used from Bankscope and the recently constructed and publically available web metrics, Alex.com, for 2008.   This paper identifies the ‘best practices’ of banks associated with measures of internet web traffic and revenue outputs.  Results identify large disparities between Arab banks’ comparative efficiency performances.  The highest technically efficient scoring banks were not necessarily the larger banks and banks that were efficient were not necessarily profitable.  No significant relationship was detected between large banks that are efficient at generating website visits and those that are efficient at generating revenues.  Smaller banks revealed more evidence of comparative efficiency performance towards generating website traffic output.  From a policy perspective, this study highlights the importance of encouraging increased efficiency throughout the banking industry in the Arab world, particularly in the area of internet banking.  It further reveals the state of some electronic data availability and transparency in the MENA region

Economic Reform, Banks’ Efficiency and Market Structure in Egypt

Egypt during the period of 2000 until 2010 witnessed major activities of economic cycles, financial reform, bank reform, development and restructuring that changed the face, structure and size of banks and the banking industry. New regulations, new laws, and Nazif’s government that was appointed in 2003, fostered the change especially during worldwide recession, economic boom, tighter regulation on the financial sector and financial crises. This thesis assessed the changes that happened in the Egyptian-banking sector during the period of 2004 until 2010, in term of efficiency change and industry structure. The research investigated the hypotheses that the lower the number of banks and the larger capital available for them, the higher the efficiency. The research used Data Envelopment analysis (DEA) methodologies to test the hypotheses on 27 banks out of 39 banks in Egypt that account for 90% of banking activities in Egypt. The input variables were the available funds and the owners’ equity. While the output variables were net loans, securities, operating profits and net profit. Output oriented tests were conducted using the BCC (Banker – Charnes – Cooper), CCR (Charnes – Cooper – Rhodes) and Window analysis. In addition to the full sample, segmentation between private vs. public and international vs. local & regional were conducted. Moreover, the research also includes a descriptive analysis of the banking activities and changes that occurred during the period of study, and conducted a concentration index for the banking sector. The research indicates that there was slight improvement in efficiency during the period of study, and that having more funds, resources may lead to improvements in efficiency. Although the banking industry increased in size (deposits, loans, profits and branches), the concentration ratio increased slightly, which indicates the dominance of few banks on the sector. The thesis recommends that banks and the central bank could work on different dimensions to improve efficiency by having better reach, products and better assets utilization, and continue in the reform to reduce the concentration ratio, especially that the public sector still has ownership in 17 banks out of the sample of the 27 banks

Banking sector depth & long-term economic growth in the GCC States: relationship nature, sector development status & policy implications

The thesis investigates the nature of the relationship between the banking sector depth and long-term economic growth in the Gulf Cooperation Council (GCC) States, assesses the banking sector development status in each of the States, and underlines the policy implications in the light of the banking-growth nexus and the banking development benchmarking models’ findings for the region by undertaking three projects. The thesis examines the nature of the relationship between banking sector depth and long-term economic growth in the NRBC—as a proxy for the GCC States— vis-à-vis the rest of the world countries. For the empirical investigation, a dynamic panel data approach, i.e. Generalised Method of Moments (GMM), is adopted over the period 1961 to 2013. By utilising mixed effects and System GMM frameworks, the research identifies the countries with the strongest banking-growth relationships and establishes the banking sector development determinants in those countries. Employing a novel benchmarking process, the thesis assesses the status of the banking sector development in each of the GCC member countries and simulates the change in the banking sector depth across the Gulf region over a period of ten years to highlight the potential policy implications for the sector development. The findings of the thesis suggest that the relationship between banking sector depth and long-term economic growth in the NRBC is non-linear, where the relationship between the banking sector depth and economic growth turns from positive to negative beyond certain levels of sector depth. In comparison to other countries, the results indicate that the banking-growth nexus in the NRBC exhibits a smaller total effect magnitude as well as a shorter time between the change in the sector depth and its effect on economic growth. The benchmarking of the banking sectors in the GCC region suggests that in five of the six member countries the banking sectors are underdeveloped. The simulation results predict that the banking sectors will develop further in half of the countries in the region, given their current levels of banking sector development determinants, while two countries require reforms in terms of undertaking regulations and policies to avoid seeing their sector development levels deteriorate. The thesis contributes to theory by confirming findings in the literature and expanding the body of knowledge through novel findings. This research also contributes to policy by demonstrating the significance of the banking sector development for long-term economic growth in the NRBC, providing policymakers in the Gulf States with the status of their banking sectors, and underlining the banking sector depth determinants that ought to be considered when setting regulations and policies that are aimed at developing the banking sector further

Evaluating productive efficiency:comparative study of commercial banks in Gulf countries

Financial institutes are an integral part of any modern economy. In the 1970s and 1980s, Gulf Cooperation Council (GCC) countries made significant progress in financial deepening and in building a modern financial infrastructure. This study aims to evaluate the performance (efficiency) of financial institutes (banking sector) in GCC countries. Since, the selected variables include negative data for some banks and positive for others, and the available evaluation methods are not helpful in this case, so we developed a Semi Oriented Radial Model to perform this evaluation. Furthermore, since the SORM evaluation result provides a limited information for any decision maker (bankers, investors, etc...), we proposed a second stage analysis using classification and regression (C&R) method to get further results combining SORM results with other environmental data (Financial, economical and political) to set rules for the efficient banks, hence, the results will be useful for bankers in order to improve their bank performance and to the investors, maximize their returns. Mainly there are two approaches to evaluate the performance of Decision Making Units (DMUs), under each of them there are different methods with different assumptions. Parametric approach is based on the econometric regression theory and nonparametric approach is based on a mathematical linear programming theory. Under the nonparametric approaches, there are two methods: Data Envelopment Analysis (DEA) and Free Disposal Hull (FDH). While there are three methods under the parametric approach: Stochastic Frontier Analysis (SFA); Thick Frontier Analysis (TFA) and Distribution-Free Analysis (DFA). The result shows that DEA and SFA are the most applicable methods in banking sector, but DEA is seem to be most popular between researchers. However DEA as SFA still facing many challenges, one of these challenges is how to deal with negative data, since it requires the assumption that all the input and output values are non-negative, while in many applications negative outputs could appear e.g. losses in contrast with profit. Although there are few developed Models under DEA to deal with negative data but we believe that each of them has it is own limitations, therefore we developed a Semi-Oriented-Radial-Model (SORM) that could handle the negativity issue in DEA. The application result using SORM shows that the overall performance of GCC banking is relatively high (85.6%). Although, the efficiency score is fluctuated over the study period (1998-2007) due to the second Gulf War and to the international financial crisis, but still higher than the efficiency score of their counterpart in other countries. Banks operating in Saudi Arabia seem to be the highest efficient banks followed by UAE, Omani and Bahraini banks, while banks operating in Qatar and Kuwait seem to be the lowest efficient banks; this is because these two countries are the most affected country in the second Gulf War. Also, the result shows that there is no statistical relationship between the operating style (Islamic or Conventional) and bank efficiency. Even though there is no statistical differences due to the operational style, but Islamic bank seem to be more efficient than the Conventional bank, since on average their efficiency score is 86.33% compare to 85.38% for Conventional banks. Furthermore, the Islamic banks seem to be more affected by the political crisis (second Gulf War), whereas Conventional banks seem to be more affected by the financial crisis

Government expenditures on education, health, and infrastructure : a naive look at levels, outcomes, and efficiency

All interested parties seem to agree that it is important to be able to monitor public sector performance at the sectoral level, but most current work based on multi-country databases does not lend itself to country-specific conclusions. This is due to a large extent to major data limitations both on sectoral expenditures and on sectoral outcomes. This paper discusses the related issues and shows what we can do with the current data inspite of the drastic limitations. The main conclusions of the paper are that any efforts to assess country-specific performances in relative terms are likely to be difficult in view of the data problems. A rough sense of performance across sectors can be estimated for groups of countries, allowing some modest benchmarking exercises. These estimates show that low-income countries generally lag significantly behind higher-income countries. Efficiency has improved during the 1990s in energy and education but has not improved significantly in transport.Transport Economics Policy&Planning,Public Sector Expenditure Analysis&Management,Inequality,Economic Theory&Research,Poverty Monitoring&Analysis

Efficiency Analysis of European Freight Villages-Three Peers for Benchmarking

Measuring the performance of Freight Villages (FVs) has important implications for logistics companies and other related companies as well as governments. In this paper we apply Data Envelopment Analysis (DEA) to measure the performance of European FVs in a purely data-driven way incorporating the nature of FVs as complex operations that use multiple inputs and produce several outputs. We employ several DEA models and perform a complete sensitivity analysis of the appropriateness of the chosen input and output variables, and an assessment of the robustness of the efficiency score. It turns out that about half of the 20 FVs analyzed are inefficient, with utilization of the intermodal area and warehouse capacity and level of goods handed the being the most important areas of improvement. While we find no significant differences in efficiency between FVs of different sizes and in different countries, it turns out that the FVs Eurocentre Toulouse, Interporto Quadrante Europa and GVZ Nürnberg constitute more than 90% of the benchmark share.Series: Working Papers on Information Systems, Information Business and Operation

Determinants of Total Factor Productivity of Libyan banks 2004 – 2010

The paper examines the determinants of Total Factor Productivity (TFP) of Libyan banks by employing Data Envelopment Analysis (DEA) based Malmquist Productivity Index (MPI) and Ordinary Least Square (OLS) estimation regression model for the period 2004 – 2010. For estimate TFP and determinants in this study we used DEAP 2.1 software and we used Evies 7 software for estimating determinants. The results showed that our variables which used in this study are not significant related to TFP

Analyzing Listed Indonesian Securities Companies’ Performance Using Data Envelopment Analysis

This study attempts to investigate the sensitivity of Data Envelopment Analysis (DEA) relative efficiencies to various inputs and output variable combinations measured for the year 2008 of the eight securities companies listed in Indonesia Stock Exchange (IDX), modeling performance measurement and to benchmark the efficient companies against the non-efficient companies. The results suggest that  PT. HD Capital Tbk, PT. Panin Sekuritas Tbk and PT. Trimegah Securities Tbk are 100% efficient in both global technical efficiency and pure technical efficiency amid the enduring global financial crisis.   The features of efficient peer companies make them very useful as role models that inefficient companies can emulate to improve their performance

Technical efficiency and returns to scale on banking sector: empirical evidence from GCC countries

This paper investigates the efficiency level of Gulf Cooperation Council (GCC) banks on technical efficiency (TE), pure technical efficiency (PTE) and scale efficiency (SE). Both PTE and SE represent potential factors that influence the efficiency of GCC banks. This study investigates a total of 43 GCC banks over the time period of 2007 to 2011. Data Envelopment Analysis (DEA), a non-parametric method using variable returns to scale (VRTS) under the Banker, Charnes, and Cooper (BCC) model, was applied, with assets and deposit as input, and loan and income as output. On average, results revealed that GCC Banks operate with an optimal scale. Nevertheless, the results were contaminated by the managerial inefficiency in utilising the recourses, although TE, or managerial efficiency, increased to 83.6% in 2011. Furthermore, the results also indicated that, while larger banks (the 22 largest) tend to operate at constant returns to scale (CRS) or decreasing returns to scale (DRS), smaller banks (the 21 smallest) were susceptible to operate at either CRS or increasing returns to scale (IRS)