Investigating the Environmental Factors Affecting US Banks' Performance Using Data Envelopment Analysis

The significant financial industry consolidation and technological developments have opened up many new businesses to banks. Managers are, hence, expected to deliver greater efficiency to improve the performance of their organizations. This paper evaluates the performance of US commercial banks and savings banks using system-differentiated data envelopment analysis (DEA) in the perspective of profitability and productivity. The special emphasis is placed on discussing how the environmental factors such as bank size, regional GDP, personal income, unemployment rates, and etc. affect the performance of US banks.