Northampton Electronic Collection of Theses and Research

A DEA and Random Forest Regression Approach to Studying Bank Efficiency and Corporate Governance

Thaker, K., Charles, V., Pant, A. and Gherman, T. (2021) A DEA and Random Forest Regression Approach to Studying Bank Efficiency and Corporate Governance. Journal of the Operational Research Society. , pp. 1-28. 0160-5682.

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Thaker_etal_JORS_2021_A_DEA_and_Random_Forest_Regression_Approach_to_Studying_Bank_Efficiency_and_Corporate_Governance.pdf - Accepted Version
Available under License Creative Commons Attribution Non-commercial.
Information
Abstract:
We employ Data Envelopment Analysis to estimate the new technical, new cost, and new profit efficiency of Indian banks over the period 2008–2018. Then, we use Random Forest Regression to examine the impact of corporate governance (Board Size, Board Independence, Duality, Gender Diversity, and Board Meetings), bank characteristics (Return on Assets, Size, and Equity to Total Assets), and other characteristics (Ownership and Years) on bank efficiency. Among others, we found that board characteristics play a significant role particularly in new profit efficiency; therefore, policymakers and regulators should consider Board Size, Board Independence, Board Meetings, and Duality while framing guidelines for enhancing bank new profit efficiency. We also found that Board Independence plays a vital role in bank new cost efficiency, while Gender Diversity contributes to both new technical and new cost efficiency. This study makes methodological contributions by employing Machine Learning based Random Forest Regression in tandem with Data Envelopment Analysis under a two-phase model to examine corporate governance and bank efficiency, which is a pioneering attempt.
Uncontrolled Keywords:
Management Information Systems, Management Science and Operations Research, Marketing, Strategy and Management
Creators:
Thaker, K., Charles, V., Pant, A. and Gherman, T.
Faculties, Divisions and Institutes:
Faculties > Faculty of Business & Law > International Strategy & Business
University Faculties, Divisions and Research Centres - OLD > Research Centre > Centre for Sustainable Business Practices
Research Centres > Centre for Sustainable Business Practices
University Faculties, Divisions and Research Centres - OLD > Research Centre > China and Emerging Economies Centre
Research Centres > China and Emerging Economies Centre
Date:
12 March 2021
Date Type:
Acceptance
Page Range:
pp. 1-28
Journal or Publication Title:
Journal of the Operational Research Society
Number of Pages:
28
Language:
English
DOI:
10.1080/01605682.2021.1907239
ISSN:
0160-5682
Status:
Published / Disseminated
Refereed:
Yes
Related URLs:
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