Page 29 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.76, # 1, 2019, pp. 20-33

Graph 4: Asset size per employee

13.6
12.2
6.6 7.9
5.4
2.5 3 3.2
0.9 1.1

Source: WB and IMF

With regards to banking sector employee’s indicators, reason of having less asset
size per employee can be explained by low asset size. Asset size per employee in
developed countries such as Austria (5.4 mln. US dollars), Sweden (12.2 mln. US
dollars) and Denmark (13.6 mln. US dollars) is more than 5 mln. US dollars.

Number of people working in the banking sector is less than the optimal size which
explains why Azerbaijan has low value for population per employee (Graph 4).

Graph 5: Population per employee (per person)

389 429
259 264
202
203
118 139 180 187

Source: WB and IMF

To assess optimal size of the banking sector in Azerbaijan, we have used elasticity
relationship between size of the banking and economic, demographic and geographic
fundamentals in developed countries for 2015. Size of the banking assets and
number of banks, bank branches and number of employees in banking sector
depends on the factors explained in table 1.

Using econometric relationship described in table 1, we have assessed optimal level
for Azerbaijan’s banking sector to reach efficiency level in developed countries (Table
3). Optimal level for Azerbaijan were calculated using coefficients in Table 2.

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