Sustainability of banks' efficiency of EU member states and the association with economic performance

The goal of the present study is to examine the sustainability of banks' efficiency in the EU27 member states in the period from 2005 to 2008 after the last enlargement of the EU and to test for eventual association with economic performance. We were interested in the differences of the banks' efficiency among the EU 27 member states and especially in the differences between old and new EU member states. To measure the efficiency we apply the data envelopment analysis (DEA), which is a non-parametric method. We found large differences of efficiency among the old EU member states. We were also interested in eventual association between economic performance and banks' efficiency. To do so we used a panel regression analysis and did not find any significant correlation between economic performance and banks' efficiency.