چکیده:
This paper examines empirically the depth of financial development in the IRAN banking industry and it's comprision with MENA banking system during 1995 -2008 by applying Panel Data method. The study measures the cost efficiency of these banks using the stochastic frontier approach (SFA). The result shows that banks in MENA area، on average، could save 20 percent of their total costs if they were operating efficiently. We use a two- stage regression method to investigate the impact of depth of financial development on bank efficiency. The findings show that، the depth of financial development of the banking industry has increased the efficiency of banking system during the period of study.
خلاصه ماشینی:
This article first estimates the efficiency for the banking systems of Middle Eastern and North African countries and then Iran in comparison with them, during the period 1995-2008, using the Stochastic Frontier Analysis (SFA)1 method and the linear-logarithmic form of the stochastic cost frontier function.
The results of this study based on the stochastic frontier function method show that the inefficiency level of the banking systems in Middle Eastern and North African countries is about 20 percent, while Iran, compared to these countries, has an inefficiency of 28 percent.
In this research, the ratio of bank deposits to Gross Domestic Product is used to examine the impact of financial depth on the cost efficiency of the banking systems of Middle Eastern and North African countries, the trend of which in some MENA countries is presented in Chart No. 1.
5- Model Specification In this research, using existing theoretical foundations, we first briefly introduce the model variables and then, using the annual data from 1995-2008, we examine the effect of financial deepening on the efficiency of the banking system in Middle Eastern and North African countries using the panel data method.
7- Results and Suggestions This study attempts to first measure the cost efficiency of the banking system in Middle East and North African countries using the stochastic frontier function method and then investigate the extent of the effect of financial deepening on efficiency using the panel data method.
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