LITERATURE REVIEW ON DEA BANKS' APPLICATION IN THE WESTERN BALKANS

Abstract

This study aims to identify and present the relevant studies employing DEA applications in bank efficiency evaluation in six Western Balkan (WB) countries as follows: North Macedonia, Serbia, Montenegro, Kosovo, Albania and Bosnia and Herzegovina (B&H). This article implements an extensive systematic literature review of studies that employ the DEA methodology in the efficiency evaluation of Western Balkan countries’ banking systems. The conducted literature review has surveyed the Scopus, Web of Science (SSCI and SCI papers) and Google Scholar databases with „Data Envelopment Analysis“, „Western Balkan“ (and each of the WB countries as keywords) and „Bank“ as keywords for the search following the PRISMA guidelines for systematic literature review. Thereafter, a manual survey of these studies was conducted, which eventually resulted in 31 papers regarding the efficiency of WB countries’ banking systems. This study provides an in-depth literature review on bank efficiency studies with DEA in each of the analysed Western Balkan countries (eight in Serbia, six in North Macedonia, none in Montenegro, three in Albania, three in Kosovo, five in Bosnia and Herzegovina and six cross-country studies that include any of these Western Balkan countries), as well as a presentation of their used models, the selected variables and their findings. The findings reveal that, in most cases, the large banks in WB are most efficient and the small-sized banks are the least efficient. This literature review indicates that the surveyed studies have been published in the period between 2008 and 2022. The findings primarily show the applicability of DEA in the bank efficiency literature.