Abstract
This paper investigates the technical efficiency and productivity of Kazakh commercial banks over the period 2000–2013. Non-parametric approaches, namely the Data Envelopment Analysis and the Malmquist index are employed to calculate technical efficiency and productivity. In addition, a second-stage regression is also estimated to identify the determinants of efficiency. The results indicate that banks in Kazakhstan operate below their optimum levels, with larger banks being more efficient than smaller ones. The results also indicate the presence of economies of scale for banks of all sizes. The efficiency of banks is found to be significantly and positively related to profitability, capitalisation, bank size, and liquidity. The results further indicate that Kazakh banks seem to have experienced a significant productivity growth over the sample period.
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