Efficiency and its determinants in the Iranian banking system

Efficiency has been among the most important goals of different organizations in order to achieve optimal allocation of resources، and minimize the costs with the current technology. Indeed، it is of great importance to calculate efficiency in different sectors and organizations to compare the competitiveness of a country among others. In this study، we try to measure the efficiency of the Iranian banking system and its determinants compared with other countries.
In doing so، we review the literature of efficiency and the empirical models on the indices of efficiency and its determinants in different banking systems.
Then the efficiency index in the Iranian banking system has been measured with the data for 14 banks during the years 1375-82. Implementing a DEA non-parametric method to capture the effects of structural and technical variables، the results suggest that technical efficiency in private banks has exceeded that of public banks in Iran. Moreover، comparing the technical efficiency of Iranian banks with that of foreign banks shows that Iranian banks have had higher efficiency in 1379-80، though this trend has changed in 1381-82.