The investigation of public, private and foreign capital banks' efficiency in Turkey by using data envelopment analysis

Today, due to the rapid development of technology, and rising needs and types of services, international competition has increased thus continuous improvement of the performance of the product and the service sectors has become mandatory. In this process, the concept of efficiency from which is one of the performance measurement criteria of the companies, has gained importance. Firms are in the best possible effort to meet the customer requirements by using the resources they have with the most effective and efficient way. The study will focus on Data envelopment analysis (DEA) that is one of the efficiency measurement methods by mentioning the concept of efficiency and how the effectiveness used in the service sector. DEA is a special application form of linear programming, are used to measure the relative effectiveness of the companies which have the same goals and objectives. DEA is used in the relative efficiency measurement between businesses, and performance measurement of a variety of shops, the comparison of the relative efficiency of hospitals and widely used in the education sector, and the insurance sector and the banking sector. The purpose of this study which also shed light on the operation of banking sector in Turkey, is explaining the concept of efficiency in terms of the banking sector, giving place to the literature studies on this subject; by measuring the efficiency of banks regarding 2009, 2010, 2011, 2012, 2013, 2014 and 2015 years; to make comparisons between the public capital banks, private capital banks and foreign capital banks in Turkey using certain data received from the website of The Banks Association of Turkey. In the application part of the study, by measuring the effectiveness of the public, private and foreign capital banks operating in the Turkish banking system, what kind of differences occur in the efficiencies of the banks will be observed over the years. Also among the public, private and foreign capital banks the most efficient banking group will be identified, and for the inefficient banks improvement suggestions will be made. According to the results obtained in the analysis, the presence of inefficient output is available in the Turkish banking system. Banks have better chance to produce more output using the same amount of input. Keywords: Data Envelopment Analysis (DEA), Effectiveness, Efficiency, Public, Private and Foreign Capital Banks, the Concept of Efficiency in the Banking Sector, Turkey. JEL Classification: G14, G21