Evaluating the efficiency of Vietnamese commercial banks - The comparison of data envelopment analysis and stochastic frontier analysis

Abstract

Banking system plays a very important role in the development of the economy. This study aims to investigate the banks’ efficiency using both parametric (SFA) and non-parametric (DEA) during the period 2008-2012. It also compares two method based on the consistency conditions. The result shows that the large banks have the higher efficiency than small banks and there is no consistency between DEA scores and SFA scores. Therefore, it is better if regulators employ multiple techniques to be more confident in drawing any policy conclusions.