An Empirical Analysis of Productivity Developments in "Traditional Banks" : The Initial Post-Liberalization Experience

By utilizing a non-parametric Malmquist index approach, we investigate the initial changes in the productivity and efficiency of the “traditional” Turkish banks in an era of financial liberalization (1980-1990). We hypothesize that the new liberal environment along with heightened competition from new banks coming from internal and external markets will discipline the traditional banks that are coming from the pre-liberalization period in resource management to economize their production inputs and/or in looking for new ways to expand their financial outputs, resulting in higher productivity and efficiency in these banks. Consistent with the expectations, we found that there is a significant upward trend in the productivity and efficiency of the traditional Turkish banks over the period under study. On the other hand, the results also indicate that the production technology of these banks has not advanced as expected. It appears that productivity growth in traditional Turkish banks mainly stems from the efforts of inefficient banks to catch up with the leading banks (efficiency increase) rather than the expansion of production frontier by the leading banks (technological progress).Traditional Banks, Productivity, Efficiency, Liberalization, Malmquist Index

The anatomy of bank performance during transition: A separate efficient frontier analysis of Ukrainian banks

By drawing on Ukrainian experience, this paper analyzes the anatomy of bank efficiency in a transitional economy. Acknowledging the vast disparities in the business technology of different size banks, in this comprehensive study, we innovatively estimate group-specific (distinct) frontiers for small, medium, and large size banks. The results from separate frontiers reveal that Ukrainian banks record 38% technical inefficiency, 26% pure technical inefficiency, and 17% scale inefficiency on average. Apparently, banks in transition waste about the two fifths of their factor inputs during the production of financial services. The cardinal source of sub-performance in transitional banks seems to be managerial inefficiencies. We also found that banks operating in areas with more political influence and more developed infrastructure outperform the banks operating in politically and economically weaker regions. The results also indicate that larger banks, enjoying public trust in a risky business climate, dominate smaller banks in all forms of efficiency. However, such bias for size causes large banks to suffer from decreasing returns to scale and small banks from idle capacity. Consequently, the policies promoting consolidation between small and large banks may alleviate the excess (idle) capacity for large (small) banks in a transitional economy

The anatomy of bank performance during transition: A separate efficient frontier analysis of Ukrainian banks

By drawing on Ukrainian experience, this paper analyzes the anatomy of bank efficiency in a transitional economy. Acknowledging the vast disparities in the business technology of different size banks, in this comprehensive study, we innovatively estimate group-specific (distinct) frontiers for small, medium, and large size banks. The results from separate frontiers reveal that Ukrainian banks record 38% technical inefficiency, 26% pure technical inefficiency, and 17% scale inefficiency on average. Apparently, banks in transition waste about the two fifths of their factor inputs during the production of financial services. The cardinal source of sub-performance in transitional banks seems to be managerial inefficiencies. We also found that banks operating in areas with more political influence and more developed infrastructure outperform the banks operating in politically and economically weaker regions. The results also indicate that larger banks, enjoying public trust in a risky business climate, dominate smaller banks in all forms of efficiency. However, such bias for size causes large banks to suffer from decreasing returns to scale and small banks from idle capacity. Consequently, the policies promoting consolidation between small and large banks may alleviate the excess (idle) capacity for large (small) banks in a transitional economy

Assessing The Relationship Between Liberalization, Ownership And Performance: The Case Of Turkish Banks

This paper employs a DEA-type Malmquist index approach to evaluate the impact of financial liberalization on the productivity changes of public, private and foreign banks in Turkey during the period between 1981 and 1990. The results indicate that all forms of banks have benefited from financial liberalization. However, foreign banks were found to be the most productive, followed by private banks and public banks respectively. The major source of productivity gains is scale changes for public and private banks and technical progress for foreign banks. It also seems that productivity growth indices of all banks converge towards the end of liberalization period

Investigation of the influence of high-pressure torsion and solution treatment on corrosion and tribocorrosion behavior of CoCrMo alloys for biomedical applications

In this study, the influence of the high-pressure torsion (HPT) processing parameters and solution treatment (ST) on the corrosion and tribocorrosion behavior of CoCrMo (CCM) alloys was investigated for possible usage in biomedical applications. The corrosion behavior of the CCM alloys was investigated by using potentiodynamic scanning (PDS) and electrochemical impedance spectroscopy (EIS) tests. Tribocorrosion tests were carried out in a reciprocating ball-on-plate tribometer at 1 Hz, 1 N load, and 3 mm stroke length for 2 h. All electrochemical measurements were performed using a potentiostat in standard phosphate-buffered saline (PBS) solution at body temperature (37 ± 2 ◦C). The samples were characterized by using a scanning electron microscope (SEM), transmission electron microscope (TEM), optical microscope (OM), and X-ray diffraction (XRD). The deepness and width of wear tracks were examined by using a profilometer. The results showed that HPT and ST processes did not affect significantly the corrosion resistance of samples. However, the ST-treated samples had a higher material loss during sliding in standard phosphate-buffered saline (PBS) at body temperature as compared to HPT-treated samples.This work was supported by Yildiz Technical University Scientific Research Projects Coordination Unit under project number of 2016-07-02-KAP01, and partially by Portuguese Foundation for Science and Technology (FCT), Portugal, under UIDB/04436/2020 project

The professional service firm (PSF) in a globalised economy: A study of the efficiency of securities firms in an emerging market

This study explores the efficiency of securities firms in Turkey and offers conceptual and managerial insights utilizing data envelopment analysis. Through a sample of local and foreign owned securities firms in Turkey, we examine the impact of liabilities of foreignness (LOF) and localness (LOL) upon knowledge intensive firm efficiency in an emerging market economy. We have extended this approach through our consideration of liability associated with market globalness (LOMG). Our findings indicate the importance of size for firm efficiency with bank affiliation and foreign ownership also having positive effects on efficiency. Our study makes a contribution conceptually, methodologically and empirically to a growing literature on emerging economies. We also make a valuable addition to the limited empirical work conducted on the securities industry to date. Finally, through our contextualization of Turkish securities firms as professional services firms (PSFs), our research extends the narrow focus on law and accounting which currently dominates the burgeoning research strand on PSFs

Bank ownership and productivity developments: evidence from Turkey

Purpose – This paper analyzes the responsiveness of different ownership forms to changing business environment by drawing on Turkish experience. Design/methodology/approach – This study is conducted in two stages. In the first stage, the paper uses Malmquist index theory, to estimate the total factor productivity change, technological change, efficiency change, pure efficiency change and scale efficiency change indexes for the Turkish banks. In the second stage, utilizing the generalized least regression format, it examines the significance of the productivity differences between different ownership forms after controlling for size and changes in the macro-economy. Findings – Under the “traditional banking definition,” productivity growth during the period was 1.2 percent for state banks, 3.9 percent for private banks and 14.2 percent for foreign banks. Under the “non-traditional banking definition,” the productivity gain over the period was 2.9 percent for state banks, 9.5 percent for private banks and 17.0 percent for foreign banks. Research limitations/implications – The future research can extend the data set and may include more explanatory factors to characterize the bank forms that record the fastest productivity growth. Practical implications – Private ownership appears to be more adaptive to new environment. Foreign banks can be used as a policy instrument to induce efficiency and productivity improvements in local banking industries. Liberalization of markets through competition boosts economic performance. Originality/value – In analyzing impacts of reforms, the significance of inter-temporal change should be tested to better guide regulators, investors and managers.Banks, Corporate ownership, Turkey

Productivity, technology and efficiency of de novo banks: A counter evidence from Turkey

Employing a non-parametric frontier method, we investigate the technical X-efficiency and productivity growth of de novo banks vis-à-vis established banks in Turkey. The purpose of the paper is to study the performance pattern of de novo banks upon establishment. Overall results suggest that de novo banks tend to outperform established banks in all aspects of productive efficiency. Productivity, technology and efficiency also tend to grow faster in de novo banks than in established banks. Most of these performance improvements, however, take place in early years. As these banks approach the age of 10, diseconomies of scale issues begin to emerge, implying that economies of scale opportunities from expanding production scales are quite limited in the Turkish banking market. We also found that foreign entries are not only more efficient but also register faster productivity growth than domestic entries, suggesting that banking authorities, especially in emerging markets, may use foreign entries to boost the efficiency performance of their banks.

The anatomy of bank performance during transition

By drawing on Ukrainian experience, this paper analyzes the anatomy of bank efficiency in a transitional economy. Acknowledging the vast disparities in the business technology of different size banks, in this comprehensive study, we innovatively estimate group-specific (distinct) frontiers for small, medium, and large size banks. The results from separate frontiers reveal that Ukrainian banks record 38% technical inefficiency, 26% pure technical inefficiency, and 17% scale inefficiency on average. Apparently, banks in transition waste about the two fifths of their factor inputs during the production of financial services. The cardinal source of sub-performance in transitional banks seems to be managerial inefficiencies. We also found that banks operating in areas with more political influence and more developed infrastructure outperform the banks operating in politically and economically weaker regions. The results also indicate that larger banks, enjoying public trust in a risky business climate, dominate smaller banks in all forms of efficiency. However, such bias for size causes large banks to suffer from decreasing returns to scale and small banks from idle capacity. Consequently, the policies promoting consolidation between small and large banks may alleviate the excess (idle) capacity for large (small) banks in a transitional economy

Total Factor Productivity Change in the Middle East Banking: The Case of Jordanian Banks at the Turn of the Millennium

This paper analyzes the total factor productivity developments in the Middle East banking, by drawing on the experience of Jordanian banks at the start of the new millennium. In order to control for the effects of different specifications of banking technology on the results, this study estimates the productivity and efficiency growth scores under two alternative approaches, production and intermediation models. On average, under the former model, we found 79% technical efficiency and 3.2% productivity growth, while under the later model we found 92% technical efficiency and 3.3% productivity growth for the sector. One implication is that the Jordanian banks can obtain considerable resource savings if they can catch up with the best practice banks. Among the organizational forms operating in this emerging market, we found that commercial banks generally outperform both investment and Islamic banks in terms of efficiency and total factor productivity growth