COMPARISON OF EFFICIENCY CHANGES OF DIFFERENT COUNTRY BANKS WITH MALMQUIST TOTAL FACTOR EFFICIENCY INDEX: AN EVALUATION ON TURKISH AND ITALIAN BANKS

Abstract

The banking sector is undoubtedly one of the main areas affected by global crises. Such adverse developments have a negative impact on banks in many countries and the banks are changing their structures on a firm basis and the banking industry is under serious deformations. In the last decade, it is known that the 2008 crisis has caused significant damage in the economies of countries. In the light of these developments, the purpose of this study is to compare the changes in Turkish and Italian banks' efficiencies. In this context, the changes in the efficiency of the banks were analyzed by using the Malmquist Total Factor Productivity Index method which is frequently used in this field by using the 2013-2016 period data. Interest expense, total deposits and number of employees are determined as input variables and interest income, total loan and net profit are determined as the output variable. As a result of the research, change is efficieny As a result of the research, within the selected period except of 2014-2015 was revealed that the change in efficiency and total factor productivity of Turkish banks were higher than those of Italian banks.