**5. Specific methodological design**

Information source: Superintendencia Financiera de Colombia.

Delimitation of the DMU: given that the Colombian banking sector is studied, the DMUs are the banks that year after year, and from 2002 and until 2016, reported their financial statements to the SFC. Reaffirming the statement by [53], DEA is generally interpreted using the notion of production technology generated by the set of observed units. For the study period, 5 government banks reported to the SFC, because they were from the government; they withdrew from the database, accepting what was expressed by [54] as to which institutions of the Government alone are comparable to each other. Additionally, a private bank that was liquidated in 1999 also reported its financial statements, but because it was not comparable, because it was not fully operational, it was also removed from the database. **Table 1** shows the number of banks that are part of the investigation for each year.

Determining the specific DEA model, as recommended by [55], since there is no evidence of constant returns to scale, we choose to use the DEA VRS model, and having a particular interest to evaluate how to obtain best results, we work with orientation to the outputs.

Delimitation of inputs and outputs: given that DEA is a nonparametric boundary model, in which it is not necessary to previously establish the production function, and that the determinant variables of the model are the resources used (inputs) and

#### *Accounting and Finance - New Perspectives on Banking, Financial Statements and Reporting*


#### **Table 1.**

*Number of banks that are part of the study.*


**Table 2.** *Input and output variables.*

what is obtained from the process of transformation of them (outputs), the variables used in this investigation are shown in **Table 2**.

Taking into account the inputs and outputs chosen for this model and going to [56], it can be established that this model is what they call an intermediation model, which consists in measuring how the entity operates based on the monetary assets it gathers (inputs), making loans and investments (outputs).

These same input and output variables have been used by [52] and by (Rodríguez-Lozano) [57] to study the insurance brokerage companies in the Colombian financial environment through DEA indicators, and also by [58] to determine relative efficiency in two subsectors of the Colombian economy from 1993 to 2002 and [59] to determine the measurement of relative efficiency in three subsectors of the Colombian economy from 1993 to 1999.
