Performance evaluation of Chinese commercial banks by an improved slacks-based DEA model

• DOI: 10.1016/j.seps.2023.101702
• Publication Date: 2023-08-19T21:10:14Z
• Authors: Xiao Shi; Libo Wang; Ali Emrouznejad

The national economy heavily relies on the banking sector, and researchers have been focused discovering most effective method of enhancing bank's overall efficiency. Data Envelopment Analysis (DEA) is a commonly utilized tool for measuring We proposed an improved slacks-based measure model (SBM) with undesirable outputs using by-production framework. In such case, operating process considered as parallel system. Inputs are categorized into interest costs costs, which then evaluated in two separate stages. first stage, income non-interest income, shared final outputs. second non-performing loans deemed This approach splits bank efficiency stages, enabling us to identify source inefficiency, effectively capture differences between types costs. To demonstrate feasibility approach, we successfully applied it 36 commercial banks China from 2016 2021. empirical results research prove that changes banks' efficiencies were mainly due stage 2. And this provides rich information assist decision making.