A three-stage DEA analysis and a black-box approach of the performance of commercial banks in Ghana : an evaluation of efficiency, competition and profitability

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dc.contributor.advisorAziakpono, Meshachen_ZA
dc.contributor.authorOku, Barbara Naa Ayeleyen_ZA
dc.contributor.authorStellenbosch University. Faculty of Economic and Management Sciences. University of Stellenbosch Business School.en_ZA
dc.date.accessioned2023-10-27T13:59:09Z
dc.date.accessioned2024-02-20T07:59:33Z
dc.date.available2023-10-27T13:59:09Z
dc.date.available2024-02-20T07:59:33Z
dc.date.issued2024-12
dc.descriptionThesis (PhD)--Stellenbosch University, 2023. en_ZA
dc.description.abstractENGLISH SUMMARY: This thesis measures the efficiency of banks, ascertains the determinants of bank efficiency, and evaluates the relationship between efficiency, competition, and profitability of 18 commercial banks in Ghana from 2008 to 2019. The first empirical paper estimates and compares efficiency scores using both the black-box and the three-stage dynamic network DEA models. Both models incorporate a slack variable and bootstrap technique, with the dynamic network DEA model measuring efficiency of the deposit mobilisation, intermediation and revenue generation activities of banks in Ghana. The results show that commercial banks in Ghana are inefficient, with efficiency scores estimated by the dynamic network model being significantly lower than scores measured by the black-box model. The commercial banks are also most efficient in intermediation and least efficient in revenue generation. The second empirical chapter uses both the truncated bootstrap and the Tobit regression models to determine the impact of internal and external factors on the efficiency scores measured by the three-stage network dynamic DEA model. Results show that Capital Adequacy Ratio (CAR) and Non-Performing Loans (NPL) ratio have a significant negative impact on production and intermediation efficiencies while liquidity ratio has a negative and positive impact on production and intermediation efficiencies respectively. Inflation rate also has a negative effect on production efficiency and size, a significant positive impact on both production and intermediation efficiencies. ROA, OC/OI and inflation rate positively affects the revenue generation processes of commercial banks assessed, while foreign ownership is seen to be detrimental to revenue generation. To ascertain the impact of competition on bank efficiency, the Boone indicator is used to measure competition. Banks in Ghana are competitive for all the years assessed using the Boone Indicator and when regressed on the efficiency types, the study observed a positive association between competition and all the types of efficiencies measured. The positive relationship between revenue generation efficiency and competition however does not yield a significant observation, indicating a lower persistence in profits across the industry as banks are unable to earn abnormal profits. The final empirical chapter uses both the efficiency– profitability matrix and the GMM regression model to assess the impact of the efficiency scores on profitability measures (ROA and ROE). Using the GMM model, all three efficiency types largely have positive impacts on both ROA and Return on Equity (ROE). The study also found that foreign ownership has a significant impact on ROA, while liquidity ratio and competition have a negative and a positive impact on ROE respectively. With the efficiency– profitability matrix, foreign-owned banks are largely classified in the high profitability, high-efficiency quadrant (Stars or Lucky), while domestic banks were mostly categorised under the low profitability, low-efficiency quadrant (Unlucky or Underdogs).en_ZA
dc.description.abstractAFRIKAANSE OPSOMMING: Hierdie tesis toets die doeltreffendheid van banke, bepaal die determinante van bankdoeltreffendheid en evalueer die verband tussen doeltreffendheid, mededinging en winsgewendheid van 18 handelsbanke in Ghana van 2008 tot 2019. Die eerste empiriese hoofstuk skat en vergelyk die tellings van doeltreffendheid met behulp van beide die swartboks- en die drie-fase dinamiese netwerk DEA-modelle. Albei modelle bevat 'n oortolligheidsveranderlike en hermonstering tegniek, met die dinamiese netwerk DEA-model wat die doeltreffendheid van die deposito-mobilisering, intermediering en inkomstegenereringsaktiwiteite van banke in Ghana meet. Die resultate toon dat kommersiële banke in Ghana ondoeltreffend is, met doeltreffendheidstellings wat deur die dinamiese netwerkmodel beraam word, en aansienlik laer is as tellings gemeet deur die swartboksmodel. Die handelsbanke is ook die doeltreffendste in intermediering en die minste doeltreffend in inkomstegenerering. Die tweede empiriese hoofstuk gebruik beide die besnoeide hermonstering en die Tobit-regressiemodelle om die impak van interne en eksterne faktore op die doeltreffendheidstellings soos gemeet deur die drie-fase netwerk dinamiese DEA-model te bepaal. Resultate toon dat die verhouding tussen Kapitaaltoereikendheidsratio (CAR) en Nie-Doeltreffende Lenings (NPL) 'n beduidende negatiewe impak op produksie- en intermedieringdoeltreffendheid het, terwyl likiditeitsverhouding 'n negatiewe en positiewe impak op onderskeidelik produksie- en intermediering doeltreffendheid het. Inflasiekoers het ook 'n negatiewe uitwerking op produksiedoeltreffendheid en -grootte, en 'n beduidende positiewe impak op beide produksie- en intermedieringdoeltreffendheid. Die Opbrengs op Bates (ROA), Bedryfskoste tot Bedryfsinkomste (OC/OI) en die inflasiekoers beinvloed die inkomstegenereringsprosesse van kommersiele banke wat beoordeel word positief, terwyl buitelandse eienaarskap as nadelig vir inkomstegenerering beskou word. Om die impak van mededinging op bankdoeltreffendheid vas te stel, word die Boone-aanwyser gebruik om mededinging te meet. Banke in Ghana is mededingend vir die tydperk wat met behulp van die Boone-aanwyser beoordeel is en wanneer op die doeltreffendheidstipes regresseer, het die studie 'n positiewe verband tussen mededinging en al die tipes doeltreffendheid getoon.Die positiewe verband tussen inkomstegenereringsdoeltreffendheid en mededinging is egter nie beduidend nie, wat dui op 'n laer bestendigheid in winste regoor die bedryf, aangesien banke nie abnormale winste kan verdien nie. Die laaste empiriese hoofstuk gebruik beide die doeltreffendheid- winsgewendheidsmatriks en die GMM-regressiemodel om die impak van die doeltreffendheidstellings op winsgewendheidsmaatreels (ROA en ROE) te bepaal. Met behulp van die GMM-model het al drie doeltreffendheidstipes grootliks 'n positiewe impak op beide ROA en Opbrengs op Eienaarsbelang (ROE). Die studie het ook bevind dat buitelandse eienaarskap 'n beduidende impak op ROA het, terwyl likiditeitsverhouding en mededinging onderskeidelik 'n negatiewe en 'n positiewe impak op ROE het. Met die doeltreffendheid- winsgewendheidsmatriks word banke in buitelandse besit grootliks geklassifiseer in die hoe winsgewendheid, hoe-doeltreffendheid kwadrant (Stars of Lucky), terwyl binnelandse banke meestal onder die lae winsgewendheid, lae-doeltreffendheid kwadrant (Unlucky of Underdogs) gekategoriseer is. Op grond van die bevindinge het die studie relevante implikasies vir beleid uitgelig.af_ZA
dc.description.versionDoctorate
dc.embargo.terms2024-04-30
dc.format.extentxviii, 225 pages : illustrations, includes
dc.identifier.urihttps://scholar.sun.ac.za/handle/10019.1/129336
dc.language.isoen_ZAen_ZA
dc.publisherStellenbosch : Stellenbosch University
dc.rights.holderStellenbosch University
dc.subject.lcshBanks and banking -- Ghanaen_ZA
dc.subject.lcshFinancial services industry -- Deregulation -- Ghanaen_ZA
dc.subject.lcshCompetition -- Economic aspects -- Ghanaen_ZA
dc.subject.nameUCTD
dc.titleA three-stage DEA analysis and a black-box approach of the performance of commercial banks in Ghana : an evaluation of efficiency, competition and profitabilityen_ZA
dc.typeThesisen_ZA
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Doctoral Degrees (University of Stellenbosch Business School)