An empirical study to measure the relative efficiency and productivity of different units of an Iranian bank using DEA and Malmquist index

In this paper, we propose a method to measure the relative efficiency of different units of a publicly traded bank using data envelopment analysis. The study also measures the productivity of different banks using Malmquist index and the results are compared with relative efficiency of banks. The proposed model uses nine financial factors reported by the bank officials for both studies where five items are used for efficiency measurement and the other four items are used for productivity measurement. The results indicate that different banks perform inefficient in terms of efficiency but they have attempted to increase their productivity. We also analyze the results and give guidelines on how inefficient units could increase their efficiency by reducing their inputs or increasing their outputs.