Banking Efficiency and Productivity Growth in the Middle East

This book investigates the efficiency and productivity of the Jordanian banking sector, during the period of financial deregulation, 1996-2007. It begins with overview of the developments in the Jordanian banks. A selective review of previous studies of banking efficiency and productivity conducted in the Middle East and the rest of the world. Then analysis and estimation of technical efficiency based on the input-oriented Data Envelopment Analysis. Followed by measuring cost efficiency, which is the product of technical and allocative efficiencies. Finally, the Malmquist Productivity Indices (MPI) are computed to examine the total factor productivity (TFP) change over the sample period. TFP change is decomposed into the products of technical efficiency change (catch-up) and technological change. The book should help policy makers and bankers in understanding the ways regulatory changes influence banks' efficiency and productivity in Middle East.