The Impact of International Trade on Central Bank Efficiency: An Application of DEA and Tobit Regression Analysis

  • Qaiser Farooq Dar Division of International Trade, Institute of Digital Economy, Incheon National University, Incheon-22012, South Korea.
  • Young-Hyo Ahn Incheon National University
  • Gulbadin Farooq Dar Department of Statistics
DOI: https://doi.org/10.19139/soic-2310-5070-1077
Keywords: Data Envelopments Analysis, Super-Efficiency, Malmquist Productivity Index, Central Bank Efficiency, International Trade

Abstract

The purpose of this study is to introduce a novel methodology to measure the central bank efficiency. The data envelopment analysis (DEA) applies in the combination of three input and two output variables characterizing the economic balance in international trade.  Super-efficiency DEA model is applied for ranking & comparing the efficiency of different central banks. In contrast, the Malmquist productivity index (MPI) is used to measure the productivity change over the period of time. Further, the study is extended to quantify the impact of international trade dimension on the efficiency of the central bank by using Tobit regression analysis. Finally, based on our data analysis, we reported that the efficiency changes over the period of time and the total productivity changes significantly due to the technology shift as compared to efficiency change. Additionally, it is also observed that the central bank efficiency is impacted dramatically by the export level of the country as compared to import level, average exchange rate and GDP. It implies that the export level of the country significantly influences the performances of the central bank.

Author Biographies

Qaiser Farooq Dar, Division of International Trade, Institute of Digital Economy, Incheon National University, Incheon-22012, South Korea.
Postdoctoral researcher  Division of International Trade, Institute of Digital Economy, Incheon National University, Incheon-22012, South Korea. Email ID: qaiserdea@gmail.com
Young-Hyo Ahn, Incheon National University
Young-Hyo Ahn, PhD in Supply Chain Management from Korea University. Currently, he is working as a full-time professor in the Division of International Trade, Institute of Digital Economy, Incheon National University, Incheon-22012, South Korea.  Office 14-212, Phone No.: +82-32-835-8545, Email.ID yhahn@inu.ac.kr.
Gulbadin Farooq Dar, Department of Statistics
Researcher Scholar Ramanujan School of Mathematical Science, Department of Statistics, Pondicherry University, Puducherry-605014, India Email ID: gulbadinstst.pu@gmail.com

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Published
2021-01-22
How to Cite
Dar, Q. F., Ahn, Y.-H., & Dar, G. F. (2021). The Impact of International Trade on Central Bank Efficiency: An Application of DEA and Tobit Regression Analysis. Statistics, Optimization & Information Computing, 9(1), 223-240. https://doi.org/10.19139/soic-2310-5070-1077
Issue
Vol 9 No 1 (2021)
Section
Research Articles
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