Efficiency and Productivity of Turkish Banks: 2005-2013

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ARTICLE 1
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FULL REFERENCE OF THE ARTICLE
Ulas, E. and Keskin, B., 2015. Performance evaluation and ranking of Turkish banking sector.
Procedia Economics and Finance, 25, pp.297-307.
OBJECTIVE AND RESEARCH QUESTION
OBJECTIVE- Objective of the research paper is to evaluate performance and ranking of the bank
in Turkish with the help of efficiency scores.
RESEARCH QUESTIONS
Q1). To quantify the efficiency and productivity of the banking sector in Turkey.
Q2). To study the technical efficiency of commercial banks those are operating in Turkey with
the help of Data Envelopment Analysis.
Q3). To measure the technical efficiency of banks by breaking technical efficiency into the scale
and pure technical components.
Q4). To examine how the banking sector of the country contributes to economic growth.
METHOD
In this particular research paper, researcher made use of secondary data that includes literature
review and data from the annual reports of the banks. Along with this Data Envelopment
Analysis approach used in this paper in order to examine and quantify the efficiency of banks.
To implement this approach researcher have to formulate the problem into the mathematical
expression. This is the mathematical technique implemented by the researchers to measure the
efficiency of any organization in any sector.
FINDINGS AND DISCUSSION
The study divides banks into three categories that are public sector bank, private sector bank and
all banks. After that technical, scale efficiency and pure technical efficiency scores calculated for
individual banks in order to identify the highest and lowest efficiency scores. In this research, it
is determined that public sector banks are more efficient as compared to other banks. Along with
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this, it is found that pure technical efficiency plays an important role as compared to the other
technical efficiency as well as scale efficiency considered as the main sources of overall
technical efficiency. Researchers found that there is an opposite trend in scale efficiency and
pure technical efficiency. In this research paper dataset obtained from the annual reports of the
selected bank during the period 2005- 2013 and this is the reason that data analysis is reliable.
This study includes 15 banks of turkey after the proper research about the bank and based on the
fact that how many branches of the bank present in the country. By making use of DEAP version
2.1 researchers carried out the analysis. To apply DEA analysis there is a need to choose inputs
and outputs and in this order, data includes three inputs and outputs. This study observed that
mean scale efficiency of the banking sector of Turkey is 95.5%.
CONCLUSION
The financial sector plays an important role in the development of the economy of the Country.
To find factors that contribute towards the development of the country it is very essential to
determine the efficiency and productivity of the banks. It can be concluded that public sector
banks of Turkey play a significant role in economic development and are more efficient than any
other banks.
CONTRIBUTION OF ARTICLE TO ESSAY 3
This article helps to make a clear understanding of how the banking sector contributes to the
growth of the economy of Turkey. To analyze the performance of a bank it is essential to
differentiate the utilization of resource efficiency among banks. There are many methods that can
be implemented to assess banks but Data Envelopment Analysis is the best way to measure
productivity and efficiency of the banking sector.
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