Modelling technical efficiency and productivity growth of UAE banks: a three-stage analytical framework Online publication date: Tue, 18-Jul-2023
by Welcome Sibanda; Mercy Chaita
International Journal of Business Performance Management (IJBPM), Vol. 24, No. 3/4, 2023
Abstract: This study tests for technical-efficiency and total-factor-productivity-growth for a sample of 60 UAE banks during the sample period 2000-2018, a period of extensive macro-prudential deregulation, sectoral consolidation and macro-economic shocks, using unique sub-sample periods mirroring expansion, recession and slowbalisation economic-cycles. We employ the DEA and the Malmquist Total Factor Productivity Index to capture technical-efficiency frontier-shifts for a multi-input-output bank. We detect technological-change-driven total-factor-productivity-growth and pure-technical-efficiency driven technical-efficiency. Efficiency-change lags economic cycles and sub-sample splits indicate significant scale inefficiency. Further, while foreign banks are more efficient than UAE domiciled banks, irrespective of size and index used, their performance deteriorates significantly more than UAE-domiciled banks during the 2008 Global Financial Crisis. Our results cast doubt on prior evidence that output proxy-choice is critical to result-robustness, specifically for long-term productivity trends. Further, the de-biased tobit regression analysis indicates a significant correlation between technical efficiency and size, diversification, financial structure, and profitability parameters.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Business Performance Management (IJBPM):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com