The technical efficiency of the Japanese banks: Non-radial directional performance measurement with undesirable output

Carlos Pestana Barros; Shunsuke Managi; Roman Matousek

doi:10.1016/j.omega.2011.02.005

The technical efficiency of the Japanese banks: Non-radial directional performance measurement with undesirable output

Carlos Pestana Barros, Shunsuke Managi, Roman Matousek

Research output: Contribution to journal › Article › peer-review

208 Citations (Scopus)

Abstract

The paper analyses technical efficiency of the Japanese banks from 2000 to 2007. The estimation technique is based on the Russell directional distance function that takes into consideration not only desirable outputs but also an undesirable output that is represented by non-performing loans (NPLs). The results indicate that NPLs remain a significant burden as for banks' performance. We show that banks' inputs have to be utilised more efficiently, particularly labour and premises. We also argue that a further restructuring process is needed in the segment of Regional Banks. We conclude that the Japanese banking system is still far away from being fully consolidated and restructured.

Original language	English
Pages (from-to)	1-8
Number of pages	8
Journal	Omega
Volume	40
Issue number	1
DOIs	https://doi.org/10.1016/j.omega.2011.02.005
Publication status	Published - Jan 2012
Externally published	Yes

All Science Journal Classification (ASJC) codes

Strategy and Management
Management Science and Operations Research
Information Systems and Management

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The technical efficiency of the Japanese banks: Non-radial directional performance measurement with undesirable output

Abstract

All Science Journal Classification (ASJC) codes

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