engleski

The impact of COVID-19 on bank efficiency in the Western Balkan: A Window DEA approach

The aim of this article is to assess and compare the relative efficiencies of commercial banks in each of the six developing countries in the Western Balkan (North Macedonia, Serbia, Montenegro, Bosnia and Herzegovina, Kosovo and Albania) by implementing the leading nonparametric methodology Data Envelopment Analysis (thereafter DEA) for the period 2016 - 2020 and to assess the impact of the COVID-19 pandemics on the efficiencies and performance of their banking systems. The output-oriented window DEA model has been implemented with interest expenses and non- interest expenses as inputs and interest revenue and non-interest revenue as outputs. The results from the DEA Window O-V model indicate that the average efficiencies of the six Western Balkan banking systems differ and Kosovo’s banking system has noted the highest average efficiency in the whole observed period (2016-2020), whereas the B&H noted lowest average efficiency. The obtained results indicate that the COVID-19 pandemic decreased the relative efficiencies of the banking sectors in all of the six observed Western Balkan countries, with an exception of Kosovo. However, further investigation with inclusion of all the pandemics’ years is advised in order to evaluate the impact COVID-19 pandemics had on the banking systems in the Western Balkans. This study provides invaluable insights for academic members, banking management and regulatory bodies, governments as well as the interested public. It is the first empirical study that includes a glimpse of the first impact of the COVID-19 pandemics on banking systems in the developing countries of the Western Balkan.

banking industry ; window data envelopment analysis ; COVID-19 ; Western Balkan

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