The Effect of EXIM Bank Efficiency on Non-Oil Export Abstract According to economic definition, Non-oil export is one of the most important indexes in economy development of each country especially in developing countries. Export import banks (EXIM) can affect the export financing of goods and services, if the bank can have cost efficiency. On the other hand, in this paper the efficiency of Iranian EXIM Bank is estimated by using Stochastic Frontier Analysis (SFA) method. Along with this purpose, On the basis of the results of final model, the output variable includes non-operating income, operating income as well as the input variable including impairment loan, provision of default and branches’ capital were significant in bank efficiency. Also, braches’ capital was one of the main input variables of the model that shows the importance of these variables in different branches of Export Development Bank. Whereas the bank is a specialty bank in non-oil exports section and its main capital is provided by the government, the role of the government in this performance is undeniable. Since the bank is a specialty bank in export domain, the effect of the bank’s efficiency on non-oil export of Iran was studied by using a linear regression. On the strength of the results , the efficiency of the bank in the under study period had an increasing trend. Also, based on the results, a significant correlation was found between the efficiency of Export Development Bank and non-oil exports in the under study period. Introduction Seven criteria for evaluating firm performance are: effectiveness, efficiency, productivity, quality, profitability and Profitability, quality of working life and creativity and innovation. The ratio of the amount of resources that are projected to achieve goals, objectives and activities Be used in proportion to the amount of resources actually used between productivity and the ratio or relationship between The amount of output produced by the firm using a certain amount of inputs is called productivity. Thus, improving the level of productivity is the result of producing more output using a fixed amount of input or producing a fixed amount of output using less input. Methodology The following steps have been taken in the research for fulfilling the research objectives: In the first step, in order to evaluate bank’s performance, the efficiency of various branches was measured using Stochastic Frontier Production Function. Accordingly, 27 branches with continuous activity during the past three years were selected as sample and their monthly efficiency was estimated. For measuring branches’ efficiency, bank’s expenses were considered as a function of input and output variables and then estimated using Frontier 4 software. Various inputs and outputs were fitted in the model and finally non-operating and operating incomes, as outputs, and impairment loan, provision of default and branches’ capital, as bank’s inputs, were identified. Bank efficiency using SFA model As mentioned above, econometric estimation of cost function requires selection of function form. The model was estimated in Cob Douglass and Translog models and research model was selected. Also, the model was estimated with different inputs and outputs. Only the final function form is entered here. General form of Cob Douglass and Translog functions are respectively as follows: is the total cost of ith bank, is output, is input price, is random error and is cost inefficiency. Keywords: EXIM Bank, Efficiency, Non Oil Export, exim bank performance – Stochastic Frontier Analysis Conclusion Whereas inputs aproved in the above model for estimating branches’ efficiency include branches’ capital, impairment loans and provision of default branches' facilities, five strategies are suggested for improving branches’ efficiency and developing non-oil exports. A) Increase of branches’ capital: branches’ capital of Export Development Bank is an exogenous variable as the bank is a governmental one and increase of branches’ capital requires direct governmental support. B) Decrease of impairment loans and provision of default: impairment loans and provision of default are two endogenous variables that are controlled by the bank and its ranches. c)The Central Bank is trying to reduce the restrictions of the rules and regulations related to commercial banks in Exim Bank Iran. d)Reduction and merger of loss-making branches that are unable to cover their costs due to the location and conditions of the branch. e)Increasing the productivity of human and physical capital by holding effective training courses and revising the recruitment and employment of manpower in a traditional way and using scientific methods to attract talented, specialized, motivated and interested manpower and etc.
Read full abstract