Measuring efficiency of listed commercial banks in Vietnam - An application of DEA and SFA approaches

Abstract

Applying two methods of Data Envelopment Analysis (DEA) and Stochastic Frontier Analysis (SFA), this thesis has examined an analysis on the efficiency level of eight listed commercial banks on the two stock exchanges in Vietnam during the period from 2007 to 2012. The study focuses on the question of whether the listed banks operate efficiently. The result shows that banks are operating close to the efficient frontier, however, although there are fully efficient banks, some banks are having relatively low efficiency scores. Findings of this thesis could help bank managers and governmental organization officers to have a clear view over the operational activities of banks on the stock market, that is which bank operates efficiently and inefficiently or where is the source of inefficiencies of these banks.