Comparing the Efficiency of European Banking Sectors from the Financialisation Perspective Using the DEA Method

Tomasz Grzegorz Florczak; Iwona Dorota Czechowska; Adam Kucharski; Joanna Stawska; Sophia Lobozynska

doi:10.18778/1508-2008.27.03

Authors

Tomasz Grzegorz Florczak University of Lodz, Faculty of Economics and Sociology, Institute of Finance, Lodz, Poland https://orcid.org/0000-0002-9111-3400
Iwona Dorota Czechowska University of Lodz, Faculty of Economics and Sociology, Institute of Finance, Lodz, Poland https://orcid.org/0000-0002-8051-5324
Adam Kucharski University of Lodz, Faculty of Economics and Sociology, Institute of Logistics and Informatics, Lodz Poland https://orcid.org/0000-0001-8699-7566
Joanna Stawska University of Lodz, Faculty of Economics and Sociology, Institute of Finance, Lodz, Poland https://orcid.org/0000-0001-6863-1210
Sophia Lobozynska Ivan Franko National University of Lviv, Ukraine

DOI:

https://doi.org/10.18778/1508-2008.27.03

Keywords:

banking sector, efficiency, financialisation, DEA

Abstract

Research background: The importance of the financial sector for the real economy has increased as there has been a transition from industrial capitalism to financial capitalism in recent years. The increasing importance of the financial sector is referred to as financialisation, and it is undoubtedly associated with finance, financial operations, or an increase in the importance of profits generated by financial activities. Financialisation is a long‑term process characterised by the growth of the banking sector. Purpose of the article: This article compares the effectiveness of banking sectors in the European Union (EU) countries from the financialisation perspective.

Methods: The study determined the efficiency of the banking sectors for the 28 EU countries using an input‑oriented, non‑radial BCC model in 2017 and assessed changes in the efficiency of the entities studied using the Malmquist index between 2008 and 2017.

Findings & value added: With certain outlays and effects, the banking sectors of seven countries were effective in 2017 from the financialisation perspective: Cyprus, Denmark, France, Luxembourg, Malta, Sweden, and the United Kingdom. The effectiveness of individual inputs for the banking sectors from each country was then determined, and benchmark leaders were identified. The analysis of the dynamics of changes in the efficiency of the banking sectors showed that Sweden had the highest values of the Malmquist index between 2008 and 2017 (where efficiency increased by 37.7%).

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