What Drives the Performance of Selected MENA Banks? A Meta-Frontier Analysis
IMF Working Papers, February 1, 2011
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Bibliographic details
- Authors: Barbara Casu, Hichem Ben-Khedhiri
- Published: February 1, 2011
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781455217922.001
Summary
- Study examines the effect of financial-sector reform on bank performance in selected Middle Eastern and North African (MENA) countries in the period 1994 -2008.
- Evaluates bank efficiency in Egypt, Jordan, Morocco, Lebanon and Tunisia by means of Data Envelopment Analysis (DEA).
- Employs a meta-frontier approach to calculate efficiency scores in a cross-country setting.
- Uses a second-stage regression to investigate the impact of institutional, financial, and bank specific variables on bank efficiency.
- Overall result: despite similarities in the process of financial reforms undertaken in the five MENA countries, observed efficiency levels of banks vary substantially across markets, with Morocco consistently outperforming the rest of the region.
- Differences in technology are highlighted as crucial in explaining efficiency differences.
Methodology
- Efficiency measurement: Data Envelopment Analysis (DEA).
- Cross-country comparability: meta-frontier approach to calculate efficiency scores across the five countries.
- Determinants analysis: second-stage regression assessing institutional, financial, and bank-specific variables on efficiency.
Key Findings and Statistics
- Geographic/sample coverage: Egypt, Jordan, Morocco, Lebanon and Tunisia.
- Time period analyzed: 1994 -2008.
- Morocco consistently outperforms other sampled markets in bank efficiency.
- Technological differences across countries are important drivers of efficiency variation.
- Pages: 31
- Volume: 2011
- Issue: 034
- Series: Working Paper No. 2011/034
- DOI: https://doi.org/10.5089/9781455217922.001
- Stock No: WPIEA2011034
- ISBN: 9781455217922
- ISSN: 1018-5941
Policy Recommendations
- Design policies that give banks incentives to improve:
- Risk management techniques.
- Portfolio management techniques.
- Improve institutional framework to reduce inefficiency:
- Enhancements in the legal system.
- Strengthening regulatory and supervisory bodies.
Subject Areas and Keywords
- Subject: Banking, Commercial banks, Financial sector, Financial sector development, Stock markets
- Keywords: bank efficiency, DEA efficiency result, efficiency score, return on assets, technology ratio, WP
Barbara Casu, and Hichem Ben-Khedhiri. "What Drives the Performance of Selected MENA Banks? A Meta-Frontier Analysis", IMF Working Papers 2011, 034 (2011), accessed 9/18/2026, https://doi.org/10.5089/9781455217922.001