Contribution of investments in human resources according to the technical efficiency type of Peruvian commercial banking
Published 2023-12-20
How to Cite
Abstract
The contribution of investments in human resources to the technical efficiency of the Peruvian multiple banking sector was evaluated during 2021. Additionally, the prevailing type of production frontier was demonstrated, and a benchmarking plan was generated. A census sample of 16 banks was measured for three inputs (employee remuneration, board expenses, and assets) and two outputs (total deposits and total outstanding credits). Seven banks were identified on the global technical efficiency frontier (GTE), 12 on the pure technical efficiency frontier (PTE), and seven on the scale efficiency frontier (SE). The mean for GTE was 0.86, for PTE was 0.95, and for SE was 0.91. It was determined that variable returns to scale prevail, the efficiency of banks does not vary with the level of investment in human resources, and a plan for potential improvements was formulated.
References
- Abbas, R. A., & Riaz. M. T. (2018). The effect of internal marketing dimensions on organizational commitment of employees: an investigation among private banks. European Online Journal of Natural and Social Sciences, 7(1), 147-165. https://european-science.com/eojnss/article/view/5270
- Agarwal, N., Guha, B., Dutta, A., & Bandyopadhyay, G. (2014). Performance measurement of Indian banks using data envelopment analysis. Lecture Notes on Information Theory, 2(3), 289-294. https://doi.org/10.12720/lnit.2.3.289-294
- Amin, G. R., & Ibn-Boamah, M. (2020). A new inverse DEA cost efficiency model for estimating potential merger gains: a case of Canadian banks. Annals of Operations Research, 295, 21–36. https://doi.org/10.1007/s10479-020-03667-9
- Anouze, A. L. M., & Bou-Hamad, I. (2019). Data envelopment analysis and data mining to efficiency estimation and evaluation. International Journal of Islamic and Middle Eastern Finance and Management, 12(2), 169-190. https://doi.org/10.1108/IMEFM-11-2017-0302
- Apoyo & Asociados (2022). Sistema bancario peruano 2022 [Reporte Sectorial]. https://www.aai.com.pe/wp-content/uploads/2023/04/Sistema-Bancario-Peru%CC%81-2022.pdf
- Banker, R. D., Charnes, A., & Cooper, W. W. (1984). Some models for estimating technical and scale inefficiencies in Data Envelopment Analysis. Management Science, 30(9), 1078-1092. https://doi.org/10.1287/mnsc.30.9.1078
- Bejar, P., Ishi, K., Komatsuzaki, T., Shibata, I., Sin, J., & Tambunlertchai, S. (2022). Can fintech foster competition in the banking system in Latin America and the Caribbean?. Latin American Journal of Central Banking, 3(2), 100061. https://doi.org/10.1016/j.latcb.2022.100061
- Berger, A. N., & Humphrey, D. B. (1997). Efficiency of financial institutions: international survey and directions for future research. European Journal of Operational Research, 98(2), 175-212. https://doi.org/10.1016/S0377-2217(96)00342-6
- Campoverde, J. A., Romero, C. A., & Borenstein, D. (2019). Evaluación de eficiencia de cooperativas de ahorro y crédito en Ecuador: aplicación del modelo análisis envolvente de datos DEA. Contaduría y Administración, 64(1), 1-19. http://dx.doi.org/10.22201/fca.24488410e.2018.1449
- Charles, V., Kumar, M., Zegarra, L. F., & Avolio, B. (2011). Benchmarking Peruvian banks using data envelopment analysis. Journal of CENTRUM Cathedra, 4(2), 147-164. https://ssrn.com/abstract=1927594
- Charles, V., & Kumar, M. (2012). Ranking Peruvian banks through super-efficiency DEA under variable returns to scale. In V. Charles & M. Kumar (eds.), Data Envelopment Analysis and its Applications to Management (pp. 116-135). Cambridge Scholars Publishlng. https://www.cambridgescholars.com/product/978-1-4438-4132-0
- Charles, V., Tsolas, I. E., & Gherman, T. (2018). Satisficing data envelopment analysis: a Bayesian approach for peer mining in the banking sector. Annals of Operations Research, 269, 81–102. https://doi.org/10.1007/s10479-017-2552-x
- Charnes, A., Cooper, W. W., Lewin, A. Y., & Seiford, L. M. (1997). Data envelopment analysis: theory, methodology and applications. Journal of the Operational Research Society, 48(3), 332-333. https://doi.org/10.1057/palgrave.jors.2600342
- Chortareas, G. E., Garza-Garcia, J. G., & Girardone, C. (2011). Banking sector performance in Latin America: market power versus efficiency. Review of Development Economics, 15(2), 307–325. https://doi.org/10.1111/j.1467-9361.2011.00610.x
- Chowdhury, A. I., Uddin, M. S., Ahmmed, M., Hassan, M. R., & Kabir, M. J. (2023). Potential risks of liquidity and credit affecting the efficiency of Islamic banks in Bangladesh. Cogent Economics & Finance, 11(1), 1-23. https://doi.org/10.1080/23322039.2023.2209950
- Cofré, L., Améstica, L., King, A., & Romero, R. (2019). Eficiencia del sector bancario en Chile ante cambios en las regulaciones de protección al consumidor financiero. Cuadernos de Contabilidad, 20(50), 51-71. https://doi.org/10.11144/Javeriana.cc20-50.esbc
- Comelli, A., Kroenke, A., & Hein, N. (2017). Eficiência dos bancos de capital aberto no Brasil: uma análise DEA. Anales de ASEPUMA, 25(210), 1-21. http://www.asepuma.org/anales/articulos/Anales.Vol25.N1.19.pdf
- Cotrim, I., Sobreiro, V. A., Kimura, H., & Mariano, E. B. (2018). Efficiency in the Brazilian banking system using data envelopment analysis. Future Business Journal, 4(2), 157-178. https://doi.org/10.1016/j.fbj.2018.05.001
- Davidovic, M., Uzelac, O., & Zelenovic, V. (2019). Efficiency dynamics of the croatian banking industry: DEA investigation. Economic Research, 32(1), 33-49. https://doi.org/10.1080/1331677X.2018.1545596
- Drake, L., Hall, M. J. B., & Simper, R. (2006). The impact of macroeconomic and regulatory factors on bank efficiency: a non-parametric analysis of Hong Kong’s banking system. Journal of Banking and Finance, 30(5), 1443-1466. https://doi.org/10.1016/j.jbankfin.2005.03.022
- Fitrianti, R., & Nurbayani, S. U. (2021). The efficiency of Islamic banks and conventional banks in Indonesia using data envelopment analysis approach. Psychology and Education Journal, 58(1), 375-381. https://doi.org/10.17762/pae.v58i1.784
- Ghahraman, A., & Prior, D. (2016). A learning ladder to ward efficiency: proposing network-based stepwise benchmark selection. Omega, 63, 83-93. https://doi.org/10.1016/j.omega.2015.10.004
- Gómez, J. C. (2012). Eficiencia y diversificación: sector de cajas de ahorros: 2000-2009 [Tesis doctoral]. https://digitum.um.es/digitum/handle/10201/28510
- Guillén, J., Rengifo, E. W., & Ozsoz, E. (2014). Relative power and efficiency as a main determinant of banks' profitability in Latin America. Borsa Istanbul Review, 14(2), 119-125. https://doi.org/10.1016/j.bir.2014.02.003
- Haider, M. A., Raza, Q., Jamel, S., & Pervaiz, K. (2019). A comparative study of operational efficiency of Pakistani and Malaysian Islamic banks: data envelopment analysis approach. Asian Economic and Financial Review, 9(5), 559-580. https://doi.org/10.18488/journal.aefr.2019.95.559.580
- Havranek, T., Irsova, Z., & Lesanovska, J. (2016). Bank efficiency and interest rate pass-through: evidence from Czech loan products. Economic Modelling, 54, 153-169. https://doi.org/10.1016/j.econmod.2016.01.004
- Henriques, I. C., Sobreiro, V. A., Kimura, H., & Mariano, E. B. (2018). Efficiency in the Brazilian banking system using data envelopment analysis. Future Business Journal, 4(2), 157–178. https://doi.org/10.1016/j.fbj.2018.05.001
- Hordones, C., & Zoratto, A. (2021). Structure, market power, and profitability: evidence from the banking sector in Latin America. Revista Contabilidad Financiera, 32(85), 126-142. https://doi.org/10.1590/1808-057x202010490
- Horvat, A. M., Milenkovic, N., Dudic, B., Kalaš, B., Radovanov, B., & Mittelman, A. (2023). Evaluating bank efficiency in the west Balkan countries using Data Envelopment. Mathematics, 11(1), 1-15. https://doi.org/10.3390/math11010015
- Hosen, M. N., Amalia, Z. R., & Muhari, S. (2016). Comparison of efficiency in conventional and Islamic banks using data envelopment analysis (DEA). Journal of Islamic Banking & Finance, 33(3), 84-95. https://islamicbanking.asia/comparison-of-efficiency-in-conventional-and-islamic-banks-using-data-envelopment-analysis-dea/
- Ji, L., Sun, Y., Liu, J., & Chiu, Y. (2023). Environmental, social, and governance (ESG) and market efficiency of China’s commercial banks under market competition. Environmental Science and Pollution Research, 30, 24533–24552. https://doi.org/10.1007/s11356-022-23742-x
- Jreisat, A., Rabbani, M. R., Omran, S., Al-Mohamad, S., & Bakry, W. (2022). An examination of the banking efficiency of the BRICS countries: a perspective derived from the oil price volatility. Cogent Economics & Finance, 10(1), 2142315. https://doi.org/10.1080/23322039.2022.2142315
- Konar, P., Sinha, R. P., Ghosh, S., & Guha, B. (2022). Fund-based activity of Indian small finance banks: a fuzzy DEA Approach. Studies in Microeconomics. https://doi.org/10.1177/23210222221122159
- Korneyev, M., Berezhniuk, I., Dzhyndzhoian, V., Nebaba, N., & Voytov, S. (2022). Efficiency assessment of banking systems’ performance. Banks and Bank Systems, 17(3), 72-88. https://doi.org/10.21511/bbs.17(3).2022.07
- Krishnasamy, G., Hanuum, A., & Perumal, V. (2004). Malaysian post merger banks’ productivity: application of Malmquist productivity index. Managerial Finance, 30(4), 63-73. https://doi.org/10.1108/03074350410769038
- Kristjanpoller, W., & Saavedra, R. (2014). La eficiencia técnica de los bancos durante la crisis. Caso aplicado a la rentabilidad de la banca comercial en México y Chile. Contaduría y Administración, 59(1), 95-122. https://www.scielo.org.mx/scielo.php?script=sci_arttext&pid=S0186-10422014000100005
- Lartey, T., James, G. A., & Danso, A. (2021). Interbank funding, bank risk exposure and performance in the UK: a three-stage network DEA approach. International Review of Financial Analysis, 75, 101–753. https://doi.org/10.1016/j.irfa.2021.101753
- León, J. V. (2009). An empirical analysis of Peruvian municipal banks using cost-efficiency frontier approaches. Canadian Journal of Development Studies, 29(1-2), 161-182. https://doi.org/10.1080/02255189.2009.9669252
- Li, D., Li, Y., Gong, Y., & Yang, J. (2021). Estimation of bank performance from multiple perspectives: an alternative solution to the deposit dilemma. Journal of Productivity Analysis, 56(2), 151–170. https://doi.org/10.1007/s11123-021-00614-z
- Li, Z., Feng, C., & Tang, Y. (2022). Bank efficiency and failure prediction: a nonparametric and dynamic model based on data envelopment analysis. Annals of Operations Research, 315, 279-315. https://doi.org/10.1007/s10479-022-04597-4
- Maredza, A., Wanke, P., Antunes, J., Pimenta, R., & Tan, Y. (2022). Social welfare and bank performance: evidence from a stochastic neural hybrid MCDM approach. Journal of Economic Studies, 49(7), 1137-1158. https://doi.org/10.1108/JES-05-2021-0236
- Martens, W., Yapa, P., Safari, M., & Watts, S. (2021). The influence of earnings management on bank efficiency: the case of frontier markets. Heliyon, 7(10), e08232. https://doi.org/10.1016/j.heliyon.2021.e08232
- Martín, R. (2008). La medición de la eficiencia universitaria: una aplicación del análisis envolvente de datos. Formación Universitaria, 1(2), 17-26. http://dx.doi.org/10.4067/S0718-50062008000200004
- Masum, A. K. M., Azad, M. A. K., & Beh, L. (2015). The role of human resource management practices in bank performance. Total Quality Management & Business Excellence, 27(3-4), 382-397. https://doi.org/10.1080/14783363.2014.1002762
- Maudos, J., Pastor, J. M., & Pérez, F. (2002). Competition and efficiency in the Spanish banking sector: the importance of specialization. Applied Financial Economics, 12(7), 505–516. https://doi.org/10.1080/09603100010007977
- MaxDEA (2023). MaxDEA Software Ltd [software de computación]. http://maxdea.com/MaxDEA.htm
- Molinos-Senante, M., Sala-Garrido, R., & Lafuente, M. (2015). The role of environmental variables on the efficiency of water and sewerage companies: a case study of Chile. Environmental Science and Pollution Research, 22(13), 10242–10253. https://doi.org/10.1007/s11356-015-4225-0
- Moquillaza, L. C. (2019). Optimización de la eficiencia operativa de las oficinas de un banco comercial peruano utilizando Data Envelopment Analysis. Pesquimat, 22(2), 15–34. http://dx.doi.org/10.15381/pesquimat.v22i2.17229
- Naimy, V. Y., & Chukri, J. (2016). Measuring the efficiency of Lebanese banks after the 2007 financial crisis and the turmoil of the 2011 Arab Spring. Aestimatio: The IEB International Journal of Finance, (13), 46-63. https://dialnet.unirioja.es/servlet/articulo?codigo=5904078
- Patra, B., Padhan, P. C., & Padhi, P. (2023). Efficiency of Indian banks – private versus public sector banks: a two-stage analysis. Cogent Economics & Finance, 11, 2163081. https://doi.org/10.1080/23322039.2022.2163081
- Piraquete, J. E., Piñeros, J. H., & Mondragón, L. (2013). Eficiencia en los establecimientos bancarios (EB): una aproximación mediante modelos DEA. Borradores de Economía, (798), 1-39. https://www.banrep.gov.co/sites/default/files/publicaciones/archivos/be_798.pdf
- Proaño-Rivera, B., & Feria-Dominguez, J. M. (2023). Are Ecuadorian banks enough technically efficient for growth? A clinical study. International Journal of Finance & Economics, 1076-9307. https://doi.org/10.1002/ijfe.2775
- Raith, A., Rouse, P., & Seiford, L. M. (2018). Benchmarking using data envelopment analysis: application to stores of a post and banking business. En S. Huber, M. Geiger, & A. de Almeida (eds.), Multiple criteria decision making and aiding. International series in operations research & management science (pp. 1-39). Springer. https://doi.org/10.1007/978-3-319-99304-1_1
- Rajaprasad, S. V. S., Rao, Y. V. S. S. V. P., & Chalapathi, P. V. (2013). Evaluation of safety performance in Indian construction segments using data envelopment analysis. Asia Pacific Journal of Business and Management, 4(1), 1-13. https://uunz.ac.nz/wp-content/uploads/2018/07/20131.pdf
- Razipour-Ghalehjough, S., Lotfi, F. H., Rostamy-Malkhalifeh, M., & Sharafi, H. (2021). Benchmarking bank branches: a dynamic DEA approach. Journal of Information and Optimization Sciences, 42(6), 1–34. https://doi.org/10.1080/02522667.2020.1833441
- Rossi, R. G., & Rossi, R. M. (2022). Análisis del riesgo de quiebra de instituciones financieras peruanas, 2015-2021. Revista Mexicana de Economía y Finanzas, 17(3), e735. https://doi.org/10.21919/remef.v17i3.735
- San-Jose, L., Retolaza, J. L., & Lamarque, E. (2018). The social efficiency for sustainability: European cooperative banking analysis. Sustainability (Switzerland), 10(9), 1-21. https://doi.org/10.3390/su10093271
- Sari, S., Ajija, S. R., Wasiaturrahma, W., & Ahmad, R. A. R. (2022). The efficiency of Indonesian commercial banks: does the banking industry competition matter? Sustainability, 14(17), 10995. http://dx.doi.org/10.3390/su141710995
- Sarmiento, M., Mutis, H., Cepeda, A., & Pérez, J. F. (2018). Impacto de las fusiones y adquisiciones en la eficiencia de la banca en Colombia. Revista de Economía Institucional, 20(38), 157-183. https://doi.org/10.18601/01245996.v20n38.07
- Saroy, R., Jain, P., Awasthy, S., & Chandra, S. (2023). Impact of digital payment adoption on Indian banking sector efficiency. Journal of Banking and Financial Technology. https://doi.org/10.1007/s42786-023-00047-2
- Seffino, M., & Hoyos, D. (2016). Eficiencia bancaria en Argentina. Comportamiento de los bancos entre 2005 y 2013. Estudios Gerenciales, 32, 44-50. https://doi.org/10.1016/j.estger.2015.12.002
- Shah, W. U. H., Hao, G., Yan, H., & Yasmeen, R. (2022). Efficiency evaluation of commercial banks in Pakistan: a slacks-based measure Super-SBM approach with bad output (Non-performing loans). PLoS ONE 17(7), e0270406. https://doi.org/10.1371/journal.pone.0270406
- Sheykhi, M. T. (2021). Human capital vs. quality of life: a sociological appraisal. Studies in Social Science Research, 3(1), 7–15. http://dx.doi.org/10.22158/sssr.v3n1p7
- Shi, X., Wang, L., & Emrouznejad, A. (2023). Performance evaluation of Chinese commercial banks by an improved slacks-based DEA model. Socio-Economic Planning Sciences, 90, 101702. https://doi.org/10.1016/j.seps.2023.101702
- Sirisunhirun, S., & Vajrapatkul, A. (2023). An application of data envelopment analysis and Malmquist productivity index in the development of human capital of ASEAN-5 countries. Thailand and the World Economy, 41(3), 88-101. https://so05.tci-thaijo.org/index.php/TER/article/view/267629
- Superintendencia de Banca, Seguros y AFP (SBS). (2023). Información estadística de banca múltiple. https://www.sbs.gob.pe/app/stats_net/stats/EstadisticaBoletinEstadistico.aspx?p=1#
- Tortosa-Ausina, E., Grifell-Tatjé, E., Armero, C., & Conesa, D. (2008). Sensitivity analysis of efficiency and Malmquist productivity indices: an application to Spanish savings banks. European Journal of Operational Research, 184(3), 1062-1064. https://doi.org/10.1016/j.ejor.2006.11.035
- Uddin, M. N., Rashid, M. H. U., & Rahman, M. T. (2022). Profitability, marketability, and CSR disclosure efficiency of the banking industry in Bangladesh. Heliyon, 8(11), e11904. https://doi.org/10.1016/j.heliyon.2022.e11904
- Yıldırım, I. (2017). Financial efficiency analysis of Islamic banks in the QISMUT countries. Journal of Islamic Economics and Finance, 3(2), 187-216. https://dergipark.org.tr/tr/download/article-file/402832
- Zhu, J. (2009). Quantitative models for performance evaluation and benchmarking: data envelopment analysis with spreadsheets. Springer. https://doi.org/10.1007/978-3-319-06647-9