An empirical investigation of efficiency and productivity in the Indian non-life insurance market

2019 ◽  
Vol 26 (7) ◽  
pp. 2343-2371 ◽  
Author(s):  
Ashiq Mohd Ilyas ◽  
S. Rajasekaran
Keyword(s):  
Life Insurance ◽  
Productivity Growth ◽  
Returns To Scale ◽  
Malmquist Index ◽  
Scale Economies ◽  
Content Type ◽  
Insurance Sector ◽  
Bootstrap Approach ◽  
Efficiency And Productivity ◽  
Practical Implications

Purpose The purpose of this paper is to analyse the performance of the Indian non-life (general) insurance sector in terms of efficiency, productivity and returns-to-scale economies. In addition to this, it identifies the determinants of efficiency. Design/methodology/approach This study employs a two-stage data envelopment analysis (DEA) bootstrap approach to estimate the level and determinants of efficiency. In the first stage, the DEA bootstrap approach is employed to estimate bias-corrected efficiency scores. In the second stage, the truncated bootstrapped regression is used to identify the effect of firm-level characteristics on the efficiency of insurers. Moreover, the bootstrapped Malmquist index is used to examine the productivity growth over the observation period 2005–2016. Findings The bootstrapped DEA results show that the Indian non-life insurance sector is moderately technical, scale, cost and allocative efficient, and there is a large opportunity for improvement. Moreover, the results reveal that the public insurers are more cost efficient than the private insurers. It is also evident that all the insurers irrespective of size and ownership type are operating under increasing returns to scale. Malmquist index results divulge an improvement in productivity of insurers, which is attributable to the employment of the best available technology. Bootstrapped DEA and bootstrapped Malmquist index results also show that the global financial crisis of 2008 has not severely affected the efficiency and productivity of the Indian non-life insurance sector. The truncated regression results spell that size and reinsurance have a statistically significant negative relationship with efficiency. It also shows a statistically significant positive age–efficiency relationship. Practical implications The results hold practical implications for the regulators, policy makers, practitioners and decision makers of the Indian non-life insurance companies. Originality/value This study is the first of its kind that comprehensively investigates different types of robust efficiency measures, determinants of efficiency, productivity growth and returns-to-scale economies in the Indian non-life insurance market for an extended time period.

scholarly journals Sources Of Efficiency And Productivity Growth In The Philippine State Universities And Colleges: A Non-Parametric Approach

2011 ◽  
Vol 6 (6) ◽  
Author(s):  
Mary Caroline N. Castano ◽  
Emilyn Cabanda
Keyword(s):  
Technical Efficiency ◽  
Productivity Growth ◽  
Returns To Scale ◽  
Malmquist Index ◽  
State Universities ◽  
Factor Productivity ◽  
Universities And Colleges ◽  
Multi Stage ◽  
Dea Models ◽  
Efficiency And Productivity

This paper evaluates the efficiency and productivity growth of State Universities and Colleges (SUCs) in the Philippines. The SUCs performance is determined on the changes in total factor productivity (TFP), technological, and technical efficiency. We use two Data envelopment analysis (DEA) models for the first time in estimating the relative performance of SUCs. Firstly, the output-orientated DEA-Malmquist index is calculated from panel data of 59 SUCS over the period 1999-2003 or a total of 295 observations, and secondly, the DEA multi-stage model (input reduction) is estimated. The two DEA models are calculated using three educational outputs and three inputs. Using Malmquist Index model, findings reveal that 49 SUCs or 83 percent are efficient. The technological index shows that six (6) SUCs or 10.16 percent only shows a technological progress. In terms of total factor productivity, SUCs obtained an index score of 1.002, which implies a productivity growth. This means that 27 SUCs or 45.76 percent shows a remarkable productivity growth. The main source of productivity growth is due to technical efficiency than innovation. In general, SUCs shows a 5.2 percent technological regression over the study period. Lack of innovation in the Philippine higher institutions has a policy implication: the Philippine government should exert more efforts to provide modern teaching and learning facilities in every state school to improve its deteriorating technological performance. Furthermore, using multi-stage method, technical efficiency has an average of 95.4 percent (Constant-returns-to scale DEA) compared with 96.6 percent (Variable-returns-to scale DEA). Finally, the scale efficiency has a 98.7 percent rating. This implies that, in general, SUCs obtained a below frontier efficiency score. The new findings in this paper may give impetus to Commission on Higher Education, lawmakers or legislators, and the university administrators to adopt measures that would be beneficial to the improvement of State Universities and Colleges in terms of inefficiency and unproductive growth.

Total factor productivity of the non-life insurers in India: Malmquist index with a new decomposition

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ashiq Mohd Ilyas ◽  
S. Rajasekaran
Keyword(s):  
Total Factor Productivity ◽  
Life Insurance ◽  
Economies Of Scale ◽  
Negative Impact ◽  
Malmquist Index ◽  
Scale Efficiency ◽  
Factor Productivity ◽  
Decomposition Approach ◽  
Content Type ◽  
Insurance Sector

PurposeThis paper aims to measure the change and the sources of change in total factor productivity (TFP) of the Indian non-life insurance sector over the period 2005–2016.Design/methodology/approachThis study employs the bootstrapped Malmquist index (MI) to assess the changes in the TFP and adopts a decomposition approach proposed by Balk and Zofío (2018). Moreover, it utilises truncated regression to identify the determinants of the TFP. In addition, it employs Wilcoxon-W test and t-test to scrutinise the difference between the state-owned and the private insurers in terms of variations in TFP and its various components.FindingsThe results divulge a miniature improvement in TFP of the insurance sector, which is primarily attributable to the improvement in scale efficiency (economies of scale). The results also reveal that there are no significant TFP differences across the ownership. However, private insurers have better scale efficiency and lower input-mix efficiency than state-owned insurers. In addition, the results unveil that size, diversification and reinsurance have a negative impact on the TFP, while age has a positive impact on it.Practical implicationsThe results may help the policymakers to frame new consolidation policies. Moreover, the findings may guide the decision-makers of the Indian non-life insurance companies to abate inefficiency and improve TFP.Originality/valueThis study estimates bias-corrected changes in TFP and efficiency in the non-life insurance sector. Moreover, it adopts an elaborated decomposition of the MI to identify the true sources of change in the TFP.

Efficiency and productivity analysis of Indian banking industry using Hicks-Moorsteen approach

2014 ◽  
Vol 63 (1) ◽  
pp. 57-84 ◽  
Author(s):  
Supran Kumar Sharma ◽  
Raina Dalip
Keyword(s):  
Productivity Growth ◽  
Banking Sector ◽  
Banking Industry ◽  
Malmquist Index ◽  
Scale Efficiency ◽  
Data Envelopment ◽  
Productivity Analysis ◽  
Financial Reforms ◽  
Content Type ◽  
Efficiency And Productivity

Purpose – The purpose of this paper is to attempt to measure the performance of the Indian banking sector in terms of efficiency and productivity levels and their determinants during the post-reform period. Design/methodology/approach – The present study is a novel attempt as it has used pooled data for a duration of 15 years (i.e. 1997/1998-2010/2011) from 59 selected banks for estimating the Hicks-Moorsteen (HM) total factor productivity (TFP) index. Findings – Poor technical efficiency has experienced with scale efficiency change exerting dominant factors; whereas relatively better productivity growth has been experienced by the banks with major contributions from technical change components. The study found relatively underestimated efficiency and productivity levels by traditional data envelopment analysis-based Malmquist index. Additionally, the study brings into account the results for external and environmental determining factors contributing to the TFP growth. Originality/value – Using HMTFP indices has helped to eliminate certain drawbacks of data envelopment and provided the more elaborative decomposition of productivity growth along with their components so as to have lucid and multidimensional insights about the performance of the Indian banking industry after the initiation of financial reforms.

Total Factor Productivity Growth of Indian Life Insurance Companies: A Malmquist Approach

2021 ◽  
pp. 232-236
Keyword(s):  
Total Factor Productivity ◽  
Life Insurance ◽  
Productivity Growth ◽  
Malmquist Index ◽  
Secondary Data ◽  
Private Life ◽  
Annual Reports ◽  
Insurance Companies ◽  
Factor Productivity ◽  
Insurance Sector

This study aimed to investigate the productivity growth of Indian life insurance companies using the Malmquist index. This study analyzed all the 24 life insurance companies' productivity performance in India from the financial year 2012-2013 to 2016-2017 using the Malmquist index based on the secondary data collected from Insurance Regulatory and Development Authority's Annual Reports. Findings indicated that the total factor productivity (TFP) of the life insurance sector increased at an average of 27.6 percent during the study period. On average, this improvement was ascribed to an efficiency improvement of 5.5 percent and a technological improvement of 20.9 percent. The results also indicated that the private life insurers experienced higher productivity growth of 30.2 percent than the state-owned Life Insurance Corporation of India's 17.2 percent. This is the first study that comprehensively analyzed the changes in total factor productivity of the Indian life insurance sector. The study holds important and practical insights for policymakers, practitioners, and decision-makers.

Productivity of the Indian non-life insurance sector

2019 ◽  
Vol 69 (4) ◽  
pp. 633-650
Author(s):  
Ashiq Mohd Ilyas ◽  
S. Rajasekaran
Keyword(s):  
Life Insurance ◽  
Average Rate ◽  
Insurance Companies ◽  
Scale Efficiency ◽  
Index Number ◽  
Content Type ◽  
Insurance Sector ◽  
Index Number Theory ◽  
Practical Implications ◽  
Observation Period

Purpose The purpose of this paper is to analyse the performance of the Indian non-life (general) insurance sector in terms of total factor productivity (TFP) over the period 2005–2016. Design/methodology/approach This study utilises Färe‒Primont index (FPI) to access the change in TFP and its components: technical change, technical efficiency and mix and scale efficiency over the observation period. Moreover, it employs the Mann–Whitney U-test to scrutinise the difference between the public and the private insurers in terms of growth in productivity. Findings The results reveal that the insurance sector possesses a very low level of TFP. Also, the results divulge an improvement of 11.98 per cent in TFP of the insurance sector at an annual average rate of 12.41 per cent over the observation period. The growth in productivity is mainly attributable to the improvement of 10.81 per cent in the scale‒mix efficiency. The progress in scale‒mix efficiency is mainly the result of improvements in residual scale and residual mix efficiency. The results also show that the privately owned insurers have experienced a high productivity growth rate than the state-owned insurers. Practical implications The results hold practical implications for the regulators, policymakers and decision makers of the Indian non-life insurance companies. Originality/value This study is the first of its kind to use FPI, which satisfies all economically relevant axioms and tests defined by the index number theory to comprehensively access the change in TFP of the Indian non-life insurance sector.

DEA window analysis and Malmquist index to assess efficiency and productivity in the Spanish electricity sector

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jaime Sánchez-Ortiz ◽  
Teresa Garcia-Valderrama ◽  
Vanesa Rodríguez-Cornejo ◽  
Francisca Cabrera-Monroy
Keyword(s):  
Malmquist Index ◽  
Electricity Sector ◽  
Theory Of Constraints ◽  
Economic Regulation ◽  
Data Envelopment ◽  
Electricity Distribution ◽  
Content Type ◽  
External Constraints ◽  
Efficiency And Productivity ◽  
Dea Window Analysis

Purpose The purpose of this paper is to demonstrate that overcapacity and tariff deficit (external constraints) negatively affect the efficiency of distribution firms in the Spanish electricity sector. To do this, the paper is based on the theory of constraints and theory of economic regulation. Design/methodology/approach Data envelopment analysis (DEA) window methodology is carried out on the constant scales (I-C) with a sample consisting of five main distribution firms during the period from 2006 to 2015. In turn, an analysis of the Malmquist index is carried out to assess whether it has had a displacement with respect to the efficiency frontier. Findings The results show that the overcapacity and the tariff deficit negatively affect the efficiency of the distribution firms of the Spanish electricity sector. In addition, there is an existence of external constraints that affect the activities of regulated organisations and the importance of adequate legislation in regulated sectors. Originality/value This study defines a model that shows how the efficiency problems associated with electricity distribution companies such as productive overcapacity or tariff deficit can be measured based on the theory of constraints and theory of economic regulation.

Longitudinal evaluation of efficiency in a petrochemical company

2017 ◽  
Vol 24 (7) ◽  
pp. 1786-1813 ◽  
Author(s):  
Charles Von Gilsa ◽  
Daniel Pacheco Lacerda ◽  
Luis Felipe Riehs Camargo ◽  
Iberê Guarani Souza ◽  
Ricardo Augusto Cassel
Keyword(s):  
Learning Process ◽  
Statistical Significance ◽  
Malmquist Index ◽  
Internal Reference ◽  
Content Type ◽  
Internal Resources ◽  
Investment Projects ◽  
Actual Change ◽  
Petrochemical Company ◽  
Efficiency And Productivity

Purpose The purpose of this paper is to longitudinally assess the technical efficiency and productivity, considering investment projects and technological change, in a second-generation petrochemical company. Design/methodology/approach The study uses data envelopment analysis (DEA) together with the Malmquist index to measure efficiency during the analysis periods. The working method consists of four main phases, namely development of the conceptual model, construction of the mathematical model, application of model to the case, and analysis of the results. The study utilizes a quantitative approach with descriptive goals seeking to evaluate the impacts of technical changes on the operational efficiency and productivity of the production process. Findings The use of DEA associated with the Malmquist index proved to be viable for analyzing a single company and identifying efficiency improvements, as well as the impacts of the learning process and the implementation of improvement projects. However, the results of the improvement projects and learning process were not representative and had no statistical significance on the actual change in efficiency of the company during the periods analyzed. For the case in question, the learning process and continuous improvement were not observed during all study periods. Practical implications The proposition that the improvement projects and investments implemented increased the efficiency of the company was rejected. Hence, with this work, it was possible to determine that the company unnecessarily invested resources in projects to increase efficiency. Furthermore, the company could have explored more internal resources before making significant investments in increased efficiency. Originality/value As for the value of this research in the theoretical and academic scope, this paper advances knowledge on the application of DEA because it proposes to establish an internal reference benchmarking for comparison. The literature contains few studies that analyze organizations using continuous processes, such as petrochemical processes, in longitudinal studies as a function of time, especially with the use of DEA.

Gender and leadership stereotypes theory: is it reaching the boundaries?

2018 ◽  
Vol 41 (11) ◽  
pp. 1336-1355 ◽  
Author(s):  
Anselmo Ferreira Vasconcelos
Keyword(s):  
Gender Bias ◽  
Leadership Style ◽  
Leadership Role ◽  
Leadership Roles ◽  
Gender And Leadership ◽  
Content Type ◽  
Gender Traits ◽  
Efficiency And Productivity ◽  
Practical Implications ◽  
Traditional Understanding

PurposeThis paper aims to answer whether the notion of the gender and leadership stereotypes theory has already reached its boundaries.Design/methodology/approachTo accomplish such a goal, it relies on the extant literature looking for more robust findings, problems, disruptions and pathways toward building a better understanding of this problematic.FindingsThe evidence gleaned throughout this paper suggests that the interplay between gender and leadership stereotypes theory has reached its boundaries. Moreover, the traditional sex stereotype or gender traits approach within companies seems to be highly limited taking into account that it tends to nurture rivalry and prejudice among people of different genders. Rather than focusing on leader sex approach or egalitarian quotas, in terms of leadership role and despite the fair argument of diversity, the author proposes that it is wiser to concentrate on a meritocratic view.Practical implicationsIt suggests that an androgyny leadership style appears to be welcomed in organizations, yet some shift about this understanding may be occurring. At present, however, female aspirants of leadership roles should work increasingly toward adapting themselves to this profile. In doing so, it is likely that they may be benefited from organizational evaluations in which the merit issue constitutes an imperative.Originality/valueOverall, it is expected to contribute to theory by arguing that the traditional understanding of gender and leadership stereotypes theory is not suitable anymore to deal with the uncertainties and complexities that shape today’s business arenas. On the contrary, it argues that such approach tends only to encourage gender bias and to nurture a somewhat sex war game in detriment of organizations efficiency and productivity.

The trapdoor in the platform: will corporate purpose be enough?

2020 ◽  
Vol 41 (2) ◽  
pp. 59-62
Author(s):  
Peter Buell Hirsch
Keyword(s):  
Middle Class ◽  
Productivity Growth ◽  
Corporate Reputation ◽  
Design Methodology ◽  
Economic Downturn ◽  
Significant Shift ◽  
Purchasing Power ◽  
Content Type ◽  
Growth Decline ◽  
Practical Implications

Purpose The purpose of the paper is to assess whether current corporate commitments to serve all stakeholders rather than just shareholders will protect corporate reputation during the coming economic downturn. Design/methodology/approach This paper reviews recent corporate commitments to corporate purpose and sustainability as well as critiques of these commitments to determine the likely public and governmental responses in the context of declining middle-class purchasing power and record profits. Findings The author believes that unless corporations make deeper commitments to productivity growth, higher wages and strengthening employment, there will be meaningful restrictions imposed upon their freedom to operate. Research limitations/implications This review of corporate commitments and critiques is selective and not comprehensive. To the extent that the findings relate to events in the future, they are, by definition, non-verifiable. Practical implications If corporations begin to address the concerns discussed here before the next sharp economic downturn, they may be able to escape significant new obligations imposed by the governments. If not, they are likely to lose both freedom of action and reputation. Social implications Depending on the flow of events, large segments of the population could turn against big corporations, representing a significant shift in the cultural and political environment. Originality/value Much has been written about the intersection of stagnation in productivity growth, decline in middle-class purchasing power and income inequality. However, the author believes that there has been little attention given to the possible implications from the perspective of corporate reputation.

Kaldor-Verdoorn's law and increasing returns to scale

2014 ◽  
Vol 41 (1) ◽  
pp. 140-162 ◽  
Author(s):  
Emanuele Millemaci ◽  
Ferdinando Ofria
Keyword(s):  
Productivity Growth ◽  
Economies Of Scale ◽  
Returns To Scale ◽  
Labor Cost ◽  
Increasing Returns ◽  
Content Type ◽  
Increasing Returns To Scale ◽  
Capital Growth ◽  
Cost Growth ◽  
Verdoorn's Law

Purpose – The aim of this study is to investigate the validity of the Kaldor-Verdoorn's law in explaining the long-run determinants of the labor productivity growth for the manufacturing sector of some developed economies (Western European Countries, Australia, Canada, Japan and the USA). Design/methodology/approach – The authors consider the period 1973-2006 using data provided by the European Commission – Economics and Financial Affairs. The method is instrumental variable. The robustness of estimates is checked by means of the Chow and the CUSUM and CUSUMQ tests. The authors consider the traditional specification of the dynamic Verdoorn law and the one which also includes investment to output ratio (I/Y), as a proxy of the capital growth rate, and the average labor cost growth, as a proxy of supply factors. Findings – The findings suggest that the law is valid for the manufacturing as countries show increasing returns to scale. Capital growth and labor cost growth do not appear important in explaining productivity growth. The estimated Verdoorn coefficients are found to be substantially stable throughout the period. Originality/value – The authors consider the most recent years, which has been characterized by a constant decline in the average GDP growth rates; a productivity growth decline; the long-term reduction in the manufacturing share of total employment. The authors examine the importance of alternative hypotheses such as those related to the existence of supply constraints. The authors check the stability of the KVL throughout the period under the consideration and across countries. The authors evaluate whether, in the case of the developed countries, economies of scale are significant.

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