%0 Journal Article
%T Disentangling the sources of bank inefficiency: a two-stage network multi-directional efficiency analysis approach.
%A Yang J
%J Ann Oper Res
%V 0
%N 0
%D 2023 May 21
%M 37361083
%F 4.82
%R 10.1007/s10479-023-05335-0
%X To disentangle the sources of bank inefficiency, this paper presents an extended two-stage network multi-directional efficiency analysis (NMEA) approach by taking the internal structure of the banking system into account. The proposed two-stage NMEA approach extends the conventional "black-box" MEA approach, providing a unique efficiency decomposition and identifying which variables drive the inefficiency for banking systems with a two-stage network structure. An empirical application of Chinese listed banks from 2016 to 2020 during the 13th Five-year Plan reveals that the overall inefficiency of sample banks is primarily sourced from the deposit-generating subsystem. Additionally, different types of banks display differentiated evolution modes over different dimensions, confirming the importance of applying the proposed two-stage NMEA approach.