Cost and Profit Efficiency of Iranian Banking Sector Using Parametric and Non-Parametric Methods

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Shekarchi, Ashkan | 2010

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Type of Document: M.Sc. Thesis
Language: Farsi
Document No: 40634 (44)
University: Sharif University of Technology
Department: Management and Economics
Advisor(s): Keshavarz Haddad, Gholamreza
Abstract:
In this research, by employing DEA non-parametric and SFA parametric methods, the cost and profit efficiency of Iranian banking system are estimated in the period 2002-2007. Afterwards, the results are evaluated and analyzed via six aspects proposed in consistency conditions. Furthermore, we take advantage of standard non-frontier performance measures namely the cost to assets ratio (TC/A) and profit to assets (/A) for comparing them with estimated cost and profit efficiencies. The findings suggest the high degree of consistency between the results of parametric and non-parametric methods; meanwhile, any significant correlation is not seen between ownership (public/private) and type of efficiency (cost/profit). In addition, there were no significant rank-order correlation between cost and profit efficiencies; in other words, the most cost efficient banks were neither the most nor the least profit efficient ones
Keywords:
Parametric Methods ; Nonparametric Method ; Cost Efficiency ; Profit Efficiency

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