Abstract

The comparative efficiency performances of the top Middle East Arab banks are measured using Data Envelopment Analysis (DEA) and Principal Components Factor Analysis (PCFA). Cross-sectional data are used from Bankscope and the recently constructed and publically available web metrics, Alex.com, for 2008. This paper identifies the ‘best practices’ of banks associated with measures of internet web traffic and revenue outputs. Results identify large disparities between Arab banks’ comparative efficiency performances. The highest technically efficient scoring banks were not necessarily the larger banks and banks that were efficient were not necessarily profitable. No significant relationship was detected between large banks that are efficient at generating website visits and those that are efficient at generating revenues. Smaller banks revealed more evidence of comparative efficiency performance towards generating website traffic output. From a policy perspective, this study highlights the importance of encouraging increased efficiency throughout the banking industry in the Arab world, particularly in the area of internet banking. It further reveals the state of some electronic data availability and transparency in the MENA region.

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