Abstract:
In this study we explore Russian banking system and its development. The
recent financial crisis of August 1998 revealed several fundamental problems in
the Russian banking sector as well as the whole economy. Our analysis focuses on
evaluation of relative performance of banks before and after the crisis. We
compare efficiency and productivity growth differentials in order to understand
what categories of banks were better performers.
As a method of study we adopt Data Envelopment Analysis (DEA). DEA
models have been extensively used for analyzing banking firms. Their advantage
is the ability to incorporate multiple inputs and multiple outputs as well as various
forms of constraints. Though this framework does not require the profit-maximization
assumption and does not explicitly account for the market structure,
it has served its purpose in providing an estimation of 'who does better'.
We found that banks performance varies for banks with different asset
size, license status, and regional status.
