Modeling the efficiency of GCC banks: a data envelopment analysis approach

Purpose The major aim of this research is to measure the relative efficiency of the top 50 Gulf Cooperation Council (GCC) banks. The sensitivity of the results is also investigated. Design/methodology/approach Data envelopment analysis (DEA) was used to evaluate the relative efficiency of GCC banks. Cross‐sectional data for the year 2005 were used to conduct the analysis. Findings The results indicate that the performance of several banks is sub‐optimal, suggesting the potential for significant improvements. Separate benchmarks were derived for possible reductions in resources used, and significant savings are possible on this account. Originality/value From a policy perspective, this study highlights the importance of encouraging increased efficiency throughout the banking industry in the GCC.