Cost efficiency analysis using relational dynamic network DEA: a case study in the Indian banking sector

The present study develops a relational dynamic network data envelopment analysis (DEA) approach to measure the cost efficiency of a network-structured decision-making unit (DMU) in a dynamic environment wherein the periods are connected through carryovers, and the divisions of a network structure are interconnected through links. The production possibility sets for the system and each period are defined from the composition of the production possibility sets for the divisions. Moreover, the current study estimates the input-output cost-efficient targets for each underperforming division, period, and system. Finally, a case study in the Indian banking sector is presented to illustrate the validity of the proposed approach. The findings show that cost-efficient targets are beneficial for policymakers.