Transformations  in
Business & Economics

REVENUE AND COST EFFICIENCY OF BANKING SECTORS IN THE EUROPEAN UNION COUNTRIES: DO THEY DEPEND ON SIZE, LOCATION OR CRISIS PERIOD?
Beata Gavurova, Jaroslav Belas, Kristina Kocisova, Rimantas Dapkus, Rasa Bartkute

ABSTRACT. The purpose of this study is to examine the revenue and cost efficiency of banking sectors within the European Union during the period from 2008 to 2015 using the extension of basic Data Envelopment Analysis (DEA). The technique of advanced DEA is applied due to its flexibility to include multiple inputs and multiple outputs, and their prices to measure relative efficiency within the dataset under the defined criteria. After the estimation of efficiencies, the nonparametric test for equality of densities is used to test whether two given distributions, estimated nonparametrically via kernel smoothing, differ statistically. The relatively new methodology prepared by Li et al. (2009) is applied to examine the differences in terms of the size, European regions, and the crisis and no-crisis years .

KEYWORDS:  banking sector, cost efficiency, revenue efficiency, DEA, European Union countries.

JEL classification:  G21, C14, C61.