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Turkish bank efficiency: Bayesian estimation with undesirable outputs

Assaf, A. George, Matousek, Roman, Tsionas, Efthymios G. (2013) Turkish bank efficiency: Bayesian estimation with undesirable outputs. Journal of Banking and Finance, 37 (2). pp. 506-517. ISSN 0378-4266. (doi:10.1016/j.jbankfin.2012.09.009) (The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided)

The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided. (Contact us about this Publication)
Official URL
http://dx.doi.org/10.1016/j.jbankfin.2012.09.009

Abstract

This paper analyzes the productivity and efficiency of Turkish banks from 2002 to 2010. We obtained estimates of efficiency, productivity growth and efficiency growth using a Bayesian stochastic frontier approach and focused on accounting for Non-Performing Loans (NPLs) for use in our model. Specifically, we introduce NPLs as a bad output in an input distance function, and estimate a system of non-linear equations subject to endogeneity. We confirm that the productivity growth of Turkish banks was positive over the period of this study, which was mainly due to the improvement in technology, while efficiency growth continued to be negative over the same period. Methodologically, we also prove that not accounting for NPLs in estimating the frontier model might seriously distort the efficiency and productivity results. The study also provides measures of shadow prices for NPL and discusses the results in terms of several interesting trends in Turkish banking. Finally, the paper provides efficiency and productivity comparisons between domestic and foreign banks. © 2012 Elsevier B.V.

Item Type: Article
DOI/Identification number: 10.1016/j.jbankfin.2012.09.009
Additional information: Unmapped bibliographic data: AD - Isenberg School of Management, University of Massachusetts, 90 Campus Center Way, 209 A Flint Lab, Amherst, MA 01003, United States [Field not mapped to EPrints] AD - Sussex University, School of Business, Management and Economics, Brighton BN1 9RH, England, United Kingdom [Field not mapped to EPrints] AD - London Metropolitan University, 84 Moorgate, London EC2M 6SQ, England, United Kingdom [Field not mapped to EPrints] AD - Department of Economics, Athens University of Economics and Business, 76 Patission Street, 104 34 Athens, Greece [Field not mapped to EPrints] JA - J. Bank. Financ. [Field not mapped to EPrints]
Uncontrolled keywords: Bank, Bayesian distance function, C11, D21, G21, G23, Non-performing loans, Turkey
Subjects: H Social Sciences > HG Finance
Divisions: Faculties > Social Sciences > Kent Business School > Accounting and Finance
Depositing User: Tracey Pemble
Date Deposited: 08 Apr 2014 14:27 UTC
Last Modified: 29 May 2019 12:04 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/39083 (The current URI for this page, for reference purposes)
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