JED
  • Home

  • |
  • Announcement

  • |
  • Event

  • |
  • Contact Us

  • Editorial Board

    • Editor-in-Chief
    • Editorial Team
  • Policies & Guidelines

    • Journal Information
    • Guidelines for Authors
    • Guidelines for Reviewers
    • Publication Ethics
  • Online Submission

    • Authors
    • Reviewers
    • Editors
  • Archives

    • Current Issue
    • All Issues
    • Search for Articles
  • Indexing & Abstracting

    • Scopus
    • Web of Science ESCI
    • Asean Citation Index
    • Google Scholar
    • V-CitationGate
    • Crossref
    • DOAJ
    • Cabell's Directories
    • EBSCO Discovery Service
    • ROAD
    • Summons (ProQuest)
    • WorldCat
    • ProQuest Central
    • EconLit

The current issue

Volume 27, Number 1, 2025
Volume 27, Number 1, 2025
Search for Articles
Home / Archives / All Issues / Volume 22, Number 2, 2020
Volume 22, Number 2, 2020 << Back
Journal of Economics and Development, Vol. 22 No. 2, pp. 209-227 | DOI 10.1108/JED-12-2019-0075

The cost efficiency of Vietnamese banks – the difference between DEA and SFA

Phong Hoang Nguyen; Duyen Thi Bich Pham

Abstract:

Purpose
The paper aims to enrich previous findings for an emerging banking industry such as Vietnam, reporting the difference between the parametric and nonparametric methods when measuring cost efficiency. The purpose of the study is to assess the consistency in issuing policies to improve the cost efficiency of Vietnamese commercial banks.

Design/methodology/approach
The cost efficiency of banks is assessed through the data envelopment analysis (DEA) and the stochastic frontier analysis (SFA). Next, five tests are conducted in succession to analyze the differences in cost efficiency measured by these two methods, including the distribution, the rankings, the identification of the best and worst banks, the time consistency and the determinants of efficiency frontier. The data are collected from the annual financial statements of Vietnamese banks during 2005–2017.

Findings
The results show that the cost efficiency obtained under the SFA models is more consistent than under the DEA models. However, the DEA-based efficiency scores are more similar in ranking order and stability over time. The inconsistency in efficiency characteristics under two different methods reminds policy makers and bank administrators to compare and select the appropriate efficiency frontier measure for each stage and specific economic conditions.

Originality/value
This paper shows the need to control for heterogeneity over banking groups and time as well as for random noise and outliers when measuring the cost efficiency.

Keywords:Cost efficiency, Data envelopment analysis, Stochastic frontier analysis, Emerging banking
Download full text:  

Other articles

  • Threshold effects of public debt on economic growth in Africa: a new evidence

    Arcade Ndoricimpa

     
  • Financial integration and macroeconomic volatility in Zimbabwe

    Richard Makoto

     
  • Interdependence between banking earnings, banking security and growth achievement: case study in the ASEAN community

    Minh Phu Pham

     
  • Corruption and SME financing structure: the case of Vietnamese manufacturing

    Mai Hong Phan; Lan Archer

     
#1406 Building A1, National Economics University, 207 Giai Phong, Hanoi
Tel: +84 (0) 24. 36280280 - Ext: 6407 | Email: submission@ktpt.edu.vn
Publishing License: 159/GP-BTTTT dated 08 May 2023
Copyright © Journal of Economics & Development. All rights reserved