A dynamic network DEA model for accounting and financial indicators: A case of efficiency in MENA banking

Peter Wanke, Md Abul Kalam Azad, Ali Emrouznejad, Jorge Antunes

Research output: Contribution to journalArticle

Abstract

Middle East and North Africa (MENA) countries present a banking industry that is well-known for regulatory and cultural heterogeneity, besides ownership, origin, and type diversity. This paper explores these issues by developing a Dynamic Network DEA model in order to handle the underlying relationships among major accounting and financial indicators. Firstly, a relational model encompassing major profit sheet, balance sheet, and financial health indicators is presented under a dynamic network structure. Subsequently, the dynamic effect of carry-over indicators is incorporated into it so that efficiency scores can be properly computed for these three substructures. The impact of contextual variables related to bank ownership, its type, and whether or not it has undergone a previous merger and acquisition process is tested by means of a stochastic non-linear model solved by differential evolution, which combines bootstrapped Simplex, Tobit, Beta, and Simar and Wilson truncated regression results. The results reveal that bank type, origin, and ownership impact efficiency levels differently in terms of profit sheet, balance sheet, and financial health indicators, although the impact of culture and regulatory barriers seem to prevail at the country level.
LanguageEnglish
Pages52-68
Number of pages17
JournalInternational Review of Economics & Finance
Volume61
Early online date18 Jan 2019
DOIs
Publication statusPublished - 1 May 2019

Fingerprint

DEA model
Network dynamics
Banking
Middle East and North Africa
Financial indicators
Ownership
Health indicators
Profit
Balance sheet
Financial health
Relational model
Network structure
Banking industry
Mergers and acquisitions
Tobit
Truncated regression
Bank ownership
Encompassing
Dynamic effects
Differential evolution

Bibliographical note

© 2019, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/

Keywords

  • Banks
  • DEA
  • Dynamic
  • MENA
  • Network
  • Stochastic optimization

Cite this

Wanke, Peter ; Abul Kalam Azad, Md ; Emrouznejad, Ali ; Antunes, Jorge. / A dynamic network DEA model for accounting and financial indicators: A case of efficiency in MENA banking. 2019 ; Vol. 61. pp. 52-68.
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A dynamic network DEA model for accounting and financial indicators: A case of efficiency in MENA banking. / Wanke, Peter; Abul Kalam Azad, Md; Emrouznejad, Ali; Antunes, Jorge.

Vol. 61, 01.05.2019, p. 52-68.

Research output: Contribution to journalArticle

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