Performance and risk in the Brazilian banking industry

This paper assesses the technical performance of Brazilian banks while accounting for risk, which is considered as an undesirable outcome of banking. To this end, frontier techniques based on Data Envelopment Analysis and directional distance functions are applied to a sample of 124 banks and data f...

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Main Authors: Francisco Javier Sáez-Fernández, Andrés J. Picazo-Tadeo, Ignacio Jiménez-Hernández
Format: Article
Language:English
Published: Elsevier 2021-03-01
Series:Heliyon
Subjects:
Online Access:http://www.sciencedirect.com/science/article/pii/S2405844021006277
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spelling doaj-7d2f455e10ce49a38ddbd8360009c0442021-04-09T10:09:16ZengElsevierHeliyon2405-84402021-03-0173e06524Performance and risk in the Brazilian banking industryFrancisco Javier Sáez-Fernández0Andrés J. Picazo-Tadeo1Ignacio Jiménez-Hernández2Department of Spanish and International Economics, University of Granada, SpainDepartment of Applied Economics II, University of Valencia; and Joint Research Group INTECO, SpainDepartment of Spanish and International Economics, University of Granada, Spain; Corresponding author.This paper assesses the technical performance of Brazilian banks while accounting for risk, which is considered as an undesirable outcome of banking. To this end, frontier techniques based on Data Envelopment Analysis and directional distance functions are applied to a sample of 124 banks and data for the six-year period 2014–19. Our main finding is that the Brazilian banking industry could notably increase its production of conventional outputs without additional input usage and while maintaining the same levels of risk. Besides, investment banks are found to be more efficient than commercial banks mainly because of their superior managerial performance.http://www.sciencedirect.com/science/article/pii/S2405844021006277Brazilian banking industryCommercial and investment banksData Envelopment AnalysisDirectional distance functionsPerformanceRisk
collection DOAJ
language English
format Article
sources DOAJ
author Francisco Javier Sáez-Fernández
Andrés J. Picazo-Tadeo
Ignacio Jiménez-Hernández
spellingShingle Francisco Javier Sáez-Fernández
Andrés J. Picazo-Tadeo
Ignacio Jiménez-Hernández
Performance and risk in the Brazilian banking industry
Heliyon
Brazilian banking industry
Commercial and investment banks
Data Envelopment Analysis
Directional distance functions
Performance
Risk
author_facet Francisco Javier Sáez-Fernández
Andrés J. Picazo-Tadeo
Ignacio Jiménez-Hernández
author_sort Francisco Javier Sáez-Fernández
title Performance and risk in the Brazilian banking industry
title_short Performance and risk in the Brazilian banking industry
title_full Performance and risk in the Brazilian banking industry
title_fullStr Performance and risk in the Brazilian banking industry
title_full_unstemmed Performance and risk in the Brazilian banking industry
title_sort performance and risk in the brazilian banking industry
publisher Elsevier
series Heliyon
issn 2405-8440
publishDate 2021-03-01
description This paper assesses the technical performance of Brazilian banks while accounting for risk, which is considered as an undesirable outcome of banking. To this end, frontier techniques based on Data Envelopment Analysis and directional distance functions are applied to a sample of 124 banks and data for the six-year period 2014–19. Our main finding is that the Brazilian banking industry could notably increase its production of conventional outputs without additional input usage and while maintaining the same levels of risk. Besides, investment banks are found to be more efficient than commercial banks mainly because of their superior managerial performance.
topic Brazilian banking industry
Commercial and investment banks
Data Envelopment Analysis
Directional distance functions
Performance
Risk
url http://www.sciencedirect.com/science/article/pii/S2405844021006277
work_keys_str_mv AT franciscojaviersaezfernandez performanceandriskinthebrazilianbankingindustry
AT andresjpicazotadeo performanceandriskinthebrazilianbankingindustry
AT ignaciojimenezhernandez performanceandriskinthebrazilianbankingindustry
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