AN APPLICATION TO THE SPANISH BANKING INDUSTRY
BibTeX
@MISC{Prior_anapplication,
author = {Diego Prior and Jordi Surroca and Diego Prior and Jordi Surroca},
title = {AN APPLICATION TO THE SPANISH BANKING INDUSTRY},
year = {}
}
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Abstract
Strategic groups in the Spanish Banking Industry are identified by means of Data Envelopment Analysis (DEA). Firms value inputs and outputs similarly within a given Strategic Group, something that leads them to react in a similar way when forced to change by external influences. DEA weights are used as valuations for inputs and outputs. Marginal Rates of Substitution (MR) between variables are approximated through comparisons of DEA weights. Two problems associated with the estimation of DEA weights are addressed in this paper: 1) their multiplicity; and 2) their inexistence in the case of inefficient DMUs. Solutions are proposed for both problems. A unique set of MRs is estimated for each DMU. Strategic Groups are determined by means of Cluster Analysis using MRs as variables and banks as observations. The traditional method of determining Strategic Groups that clusters original variables is also applied and the results are compared. It is shown that the DEA approach has advantages over the traditional methodology. The results offer interesting insights into the Spanish Banking Industry.
Keyphrases
strategic group dea weight application spanish banking industry spanish banking industry cluster original variable interesting insight marginal rate firm value input unique set dea approach traditional method similar way inefficient dmus traditional methodology external influence cluster analysis data envelopment analysis
