An Integrated DEA-Efficiency Evaluation To Commercial Banks

Efficiency evaluation is regarded as a task of high frequency, great difficulty and remarkable importance in economic circles, or in social activities. The conception efficiency mentioned in this paper is technical efficiency, which originated from the economical field. In 1957 Farrell first proposed to employ Frontier Production Function to estimate technical efficiency, and he defined technical efficiency as the ratio of the actual production competence and the frontier production competence. The paper extends this viewpoint to commercial banks, not limited to manufacturing enterprises.Basically this paper employs Data Envelopment Analysis (DEA) to gauge technical efficiency. DEA is a resultful tool to evaluate the relative efficiencies among Decision Making Units (DMUs) with multiple inputs and multiple outputs. Charnes et al set up the first DEA model, i.e. CCR model, in 1978. Henceforth DEA become one of the most important methods for efficiency evaluation.DEA have been widely applied in commercial bank appraisement in real world practice. However, the current researches have two limitations, including: first, the existing researches are focusing on one-sided character, not all-sided character for commercial bank performance. Second, litter of the existing research has considered the service level such as waiting time in appraising the performance of commercial banks.Therefore the current dissertation tries to solve the two problems using the exising DEA models based on a real world example of an Anhui commercial bank. The achievement of the dissertation can elementarily solve the above two problems. The value of this paper includes: (1) all-sided character estimation using DEA models; (2) Consider service level in commercial bank appraisement.