APPLICATION OF DEA METHOD IN MEASURING OF MARKET EFFICIENCY OF BANKS IN BOSNIA AND HERZEGOVINA AND REFLECTION OF THE COVID-19

Authors : Beriz CİVİC

Pages : 46-58

Doi:10.33818/ier.844228

View : 27 | Download : 10

Publication Date : 2023-01-12

Article Type : Research Paper

Abstract :By using the DEA method, the paper measures market efficiency of the banks in Bosnia and Herzegovina in the period 2017-2020, in the context of challenges caused by the COVID-19. The aims of the research are: a); to measure market efficiency of the banks in Bosnia and Herzegovina and rank them using the DEA method insert ignore into journalissuearticles values(applying three models CCR-O, BCC-O, and Window-I-C);, b); establish the effect of the COVID-19 pandemic on market efficiency of the observed banks, and c); established the link between the volume of digital banking services usage and market efficiency of the observed banks. The research results show that in 2020, when the COVID-19 appeared, CCR-O and BCC-O models revealed a decrease in market efficiency for 73.9% of the observed banks while Window-I-C model revealed lower market efficiency for all the observed banks. The regression analysis applied showed a significant link between the volume of digital banking services usage market efficiency of the observed banks. The regression model was established, pointing to a significant importance of independent variables for the prediction of the dependent variable.
Keywords : market efficiency, banks, DEA method