Efficiency in BRICS banking under data vagueness: a two-stage fuzzy approach

Peter Wanke*, Abul Kalam Azad, Ali Emrouznejad

*Corresponding author for this work

Research output: Contribution to journalArticle

Abstract

This study analyzes the efficiency levels of the banking industry in the BRICS countries (Brazil, Russia, India, China, and South Africa) from 2010 to 2014, using an integrated two-stage fuzzy approach. Very often the reliability of data collected from BRICS is questionable. In this research, we first use fuzzy TOPSIS to capture vagueness in the relative efficiency of BRICS banking over time. In the second stage, we adopt fuzzy regressions based on different rule-based systems to enhance the power of significant socioeconomic, regulatory, and demographic variables to predict banking efficiency. These variables are previously identified by using bootstrapped truncated regressions with conditional α-levels, as proposed by Wanke, Barros, and Emrouznejad (2015a). The results reveal that efficiency in the banking industry is positively associated with country gross savings and the GINI index ratio, but negatively associated with relatively high inflation ratios. Fuzzy regressions proved far more accurate than bootstrapped truncated regressions with conditional α-levels. We derive policy implications.
Original languageEnglish
Pages (from-to)58-71
JournalGlobal Finance Journal
Volume35
Early online date27 May 2017
DOIs
Publication statusPublished - Feb 2018

Bibliographical note

© 2017, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/

Keywords

  • banking performance
  • BRICS
  • fuzzy TOPSIS
  • fuzzy regression
  • data reliability

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