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A review of bank efficiency and productivity

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Abstract

The objective of this study is to present a systematic literature review in the context of bank efficiency and productivity. It focuses on the recent developments related to empirical methodological advances and new dimensions added to the ever-growing field of bank performance analysis. Selected research papers were coded in terms of their key objectives and were segregated into 11 themes—Branch, Comparison, Consolidation and Expansion, Deregulation and Regulation, Environment, Input–output, Methodological advances, Non-traditional activities, Risk, Stock performance and Others. The 103 selected studies were further analysed based on efficiency measures, input–output approaches and methodology. While summarising the extant literature on bank efficiency and productivity, the ongoing debate regarding the optimal input output approaches and ideal frontier techniques for bank performance analysis has also been dealt with. The current study also highlights the possible future research avenues in this area.

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Notes

  1. Productivity in simple terms can be defined as the ratio of output to input. Efficiency in simple terms can be defined as the comparison between actual and optimal or achievable values of outputs and inputs. For standard definitions, please refer to Coelli et al. [7].

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Acknowledgements

We are thankful to N. M. Ganguli, Managing Editor, OPSEARCH and the reviewers for the constructive comments and an opportunity to improve our work.

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Authors and Affiliations

  1. Indian Institute of Management Raipur, Raipur, Chhattisgarh, India

    Vaneet Bhatia, Subrata Kumar Mitra & Pradyumna Dash

  2. Indian Institute of Management Bangalore, Bengaluru, Karnataka, India

    Sankarshan Basu

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  1. Vaneet Bhatia
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  2. Sankarshan Basu
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  3. Subrata Kumar Mitra
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Correspondence to Vaneet Bhatia.

Appendix

Appendix

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Table 2 Identified themes
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Bhatia, V., Basu, S., Mitra, S.K. et al. A review of bank efficiency and productivity. OPSEARCH 55, 557–600 (2018). https://doi.org/10.1007/s12597-018-0332-2

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