Data Envelopment Analysis and Decision Science

Volume 2015, No. 1 (2015), Pages 32-49

Article ID dea-00090, 18 Pages

doi: 10.5899/2015/dea-00090


Research Article


Zimbabwe commercials banks efficiency and productivity analysis through DEA Malmquist approach: 2002-2012


Jacob Muvingi1 *, Suggest Hotera1


1Harare Institute of Technology, Ganges Road Belvedere Harare, Zimbabwe


* Corresponding author. Email address: jmuvingi@hit.ac.zw. Tel: +2634741429


Received: 27 August 2014; Accepted: 24 October 2014


Copyright © 2015 Jacob Muvingi and Suggest Hotera. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

Majority of data envelopment analysis studies have been focused on developed economies and economies in Asia, and very few studies on developing economies particularly African economies. This research aims to determine bank efficiency and productivity change of Zimbabwean commercial banks. The DEA model was used to measure the efficiency of 10 commercial banks working in Zimbabwe. The intermediation approach was used to specify variables. The average scores of technical efficiency under the Constant Returns to Scale (CRS) and Variable Returns to Scale (VRS) assumptions for the commercial banking sector as a whole are 70.95% and 81.5% respectively. The average scale efficiency for commercial banks operating in Zimbabwe was found to be 73.7%.Through applying the Malmquist Productivity Index (MPI) method; it was found that the mean total factor productivity increase for Zimbabwean commercial banks from 2003 to 2012 is 13.8%. The results also showed that the total factor productivity index peaked in 2009 where it reached a value of 121.1% and reached the lowest point in 2005 were it went down to (-52%).


Keywords: Efficiency, Productivity, DEA, Malmquist, Commercial Banks; Zimbabwe

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