Using Operating Research and Panel Data Models to Diagnose the Iraqi Banking Sector

Abstract

In a world where technology has made it a small village, the banking sector plays a pivotal role in our economic life. The harmony of its inputs and outputs makes it more attractive and interested to customers. This paper came to diagnose the reality of the Iraqi banking economy by using the Data Envelopment Analysis (DEA), and methods of analyzing Panel data. The efficiency was measured through DEA with inputs in which represented by property rights and deposits, while outputs were represented by shareholder rights, deposits, credit facilities and total assets. The Panel’s models were employed in these studying, also the correlation among efficiency, profitability and market value. The study concluded that the Iraqi banks enjoy high efficiency, and showed the existence of reciprocal relations between the variables of the study, and the appropriate model was the aggregate model. The study recommended taking advantage of statistical methods in setting reliable economic indicators to detect some weaknesses in the banking sector.