Dynamic Efficiency Assessment of the European Banking Industry: A Literature Review

This paper aims to survey, identify and present the relevant stud­ies and their findings regarding the efficiency of banking systems in Europe with the application of the Data Envelopment Analysis (DEA) window tech­nique approach. Notwithstanding, another goal is to provide a background on the DEA methodology and present the window technique approach and highlight its strengths and limitations. This article implements an extensive literature review of studies that employ the WDEA (window DEA) methodology in the efficiency evaluation of Eu­ropean banking. The conducted literature review has surveyed the Scopus, Web of Science (SSCI and SCI papers) and CROSBI (Croatian Scientific Bib­liography) databases with „Data Envelopment Analysis“, „Window“ and „Bank“ as keywords for the search, which resulted in a total of 89 hits (41 in Scopus, 47 on WoS and 1 on CROSBI). Thereafter, a manual survey of these studies has been conducted, which eventually resulted in 12 papers regard­ing the efficiency of European banking. This study identifies all the relevant previous work regarding the efficiency of European banking with the appli­cation of WDEA (DEA-window technique) as well as a presentation of their used models, the selected variables and their findings. This literature review indicates that the surveyed studies have been pub­lished in the period between 2007 and 2020 and have included the time frame from 1995 to 2017. The longest study includes 13 years, whereas the shortest includes 3 analysed years. The findings primarily show the applicability of WDEA in the literature.