A comparative analysis of the efficiency of commercial and specialized banks in the period 2001-2008 in Iran

Abstract

Respecting the basic role of banking system in the countries’ economy, the efficiency of banking industry
has  been  considered  by  statesmen  and  setting  up  an  efficient  network  of  branches  is  one  of  main  solutions  in  
managing plans for efficiency improvement at the level of a bank. Based on this, it is attempted in present article to
examine the level  of  efficiency and  inefficiency of  9  active  banks  of  the  country (6  commercial  banks  including;
Refah  Kargaran,  Mellat,  Melli, Sepah,  Saderat, and 3 specialized  banks of Maskan,  Sanat o Madan(industry and
mining),  Keshavarzi).In  this  study,  statistics  of  9banks  during  2001-2008  was  utilized  based  on  intermediate
approach  and  stochastic  frontier  approach  (SFA)  within  Translog  cost  function  and  model  1of  Battese  and  Coelli
(1992). The results of this study show that average efficiency of commercial banks is 87.58% and average efficiency
of specialized banks is  87.95% , which indicates that the average efficiency of specialized banks was higher than of
commercial banks.