Studying the efficiency of Vietnamese commercial banks by using data envelopment approach (DEA)

Abstract

Assessment of resource use e ciency of a decision-making unit (Decision Making Unit - DMU) based on non-parametric approaches of Data Envelopment Analysis (DEA) has been widely applied in many elds and in many parts of the world. This method is based on the calculation of the production capacity constraint that can be obtained from the given inputs, from which it compares with the current output to e ectively evaluate the use of those inputs and provide suggestions for improving the e ciency of using these resources. The objective of the paper is to evaluate the e ectiveness of using relatively basic inputs of some joint stock commercial banks (JSBs) in Vietnam in recent years such as total salary and allowance (L), xed assets (K) and deposit (D) to the outputs like interest income (Y1) and non-interest income (Y2). Research results at 24 Vietnamese commercial banks show that although technical e ciency are relatively good (averaging 81.7%) but there is still great possibility for these banks to further improve the e ciency of their inputs. Keyword: Vietnam, data envelopment analysis, commercial bank, e ciency.