Determinants of technical efficiency of banks in Yemen

• Main Author: Al-Attafi, Mohamed Ali Mohamed
• Format: Thesis
• Language: English; English
• Published: 2014
• Subjects: HG Finance
• Online Access: https://etd.uum.edu.my/4303/1/s92573.pdf; https://etd.uum.edu.my/4303/2/s92573_abstract.pdf; https://etd.uum.edu.my/4303/
• Institution: Universiti Utara Malaysia

The main objective of this thesis is to identify the efficiency level and the determinants of efficiency of the Yemeni banks over the period from 1998 to 2011. This thesis consists of three specific objectives. The first objective is to determine the technical, pure technical and scale efficiency score of banks. The second objective is to analyse the differences in efficiency in terms of banks identity, bank type and internationalization of banks. The third objective aims to identify factors that determine efficiency. The twostage approach which consists of data envelopment analysis (DEA) and Tobit regression is employed in analyzing the data. Specifically, the DEA was used to estimate banking efficiency in the first stage, while the Tobit regression was applied in examining the determinants of the efficiency obtained from the first stage. The results of DEA show that, on average, technical, pure technical and scale efficiencies for all banks over the sample period are 74.5%, 86.3% and 85.5%, respectively. The results also indicate that most Yemeni banks are facing scale problems due to decreasing returns to scale. In addition, the results reveal that there are significant difference in efficiency among banks operating in Yemen based on their identity, bank type and internationalization of banks. Moreover, the results from Tobit regression illustrate that there is a positive relationship between efficiency scores and internationalization of banks, type of banks, intellectual capital performance and gross domestic product, while banks size and profitability have significant negative influence on efficiency. A major contribution that arises from the study is that this is the first study that shows the importance of intellectual capital performance in ensuring banks efficiency especially in Yemen.