Analyzing Efficiency and Productivity Dynamics Using the Malmquist Index: An Applied Study on a Sample of Private Commercial Banks in Iraq for the Period (2020-2023)

Abstract

This study aims to analyze the dynamics of efficiency and productivity in a sample of private commercial banks in Iraq for the period (2020-2023) using the Malmquist Productivity Index (MPI). The research employed a deductive approach with Data Envelopment Analysis (DEA) as the analytical tool to measure productivity changes and decompose them into key components such as technical efficiency and technological change. The results revealed significant fluctuations in bank performance, with productivity sharply declining in 2021 due to the impact of the COVID-19 pandemic and falling oil prices, while surging in 2022 as economic conditions improved and investments in technology increased. However, performance declined again in 2023 due to weak technological and structural sustainability. The analysis also highlighted considerable disparities in the performance of individual banks, with some showing notable improvements in efficiency, while others faced structural challenges. The main conclusion indicates that Iraqi private banks' productivity is significantly influenced by external shocks and internal technological capabilities, with limited contribution to sustainable economic development due to structural inefficiencies. The study provides recommendations to enhance banking stability, including increasing investments in financial technology, improving scale efficiency through mergers, and restructuring the administrative frameworks of struggling banks.