Disentangling Within- and Between-Country Efficiency Differences of Bank Branches

Abstract

: In this paper we propose a framework to assess the efficiency of bank branch networks operating in different financial environments. The framework can be used to disentangle within- from between-country performance differences. The framework is constructive in that it identifies operational aspects responsible for superior performance and suggests guidelines for branch improvement. We report results from three bank branch networks in the U.K., Greece and Cyprus, and demonstrate how branch networks can benefit from such international comparisons. This paper was presented at the Wharton Financial Institutions Center's conference on The Performance of Financial Institutions, May 8-10, 1997. Keywords : Bank Branch Efficiency, International Benchmarks, Data Envelopment Analysis. 1. Introduction The assessment of the performance of financial institutions is given unprecedented publicity for reasons related to stringent market conditions, competitive pressures, entrance of substi...