Authors
1 Faculty member of the Faculty of Economics, Allameh Tabatabai University
2 Faculty of Economics, Allameh Tabatabai University
Abstract
Data over the period 1988-1997 relating to 10 Iranian Banks are used to estimate their technical efficiencies. The translog stochastic production function assumed for the estimation of the technical efficiency of Iranian banks expressed in terms of four input variables: the number of employees, fixed assets, and three types of deposits, where total loans are regarded as output. The two models applied in this paper are Battese and Coelli, (1992), and Battese and Coelli, (1995). The technical efficiencies of the banks, using these models, are estimated, on average, to be 79.8 percent and 78.3 percent. In addition, the technical efficiencies are directly related to total assets, type of banks, the ratio of the number of branches located in Tehran, but inversly related to the ratio of loans granted under Mozarebeh and Mosharekat-e-Madani contracts, and the ratio of bank employees qualified with university education.
)