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.

scholarly journals Efficiency and Productivity Performance of the National Private Banks in Indonesia

2007 ◽  
Vol 9 (1) ◽  
pp. 1 ◽  
Author(s):  
Mohd. Azmi Omar ◽  
M. Shabri Abd. Majid ◽  
Ronald Rulindo
Keyword(s):  
Productivity Growth ◽  
Technical Change ◽  
Banking Industry ◽  
Malmquist Index ◽  
Data Envelopment ◽  
Islamic Banks ◽  
Efficiency Change ◽  
Private Banks ◽  
Using Data ◽  
Efficiency And Productivity

This study investigates the efficiency and productivity performance of the national private banks in Indonesia during the period of 2002-2004. The data consist of 21 national private banks including two Islamic banks. Productivity is measured by the Malmquist Index using Data Envelopment Analysis (DEA) technique. Overall, the result shows that the Total Factor Production (TFP) Index of the national private banks has considerably increased for the whole industry, in which technical change is found to be a more important source of productivity growth to the Indonesian Banking Industry compared to efficiency change. Furthermore, the result also shows that the efficiency of two Islamic banks is above the average efficiency of the national private banks.

scholarly journals Technical efficiency and total factor productivity in the Kazakh banking industry

2016 ◽  
Vol 66 (4) ◽  
pp. 685-709
Author(s):  
Adnan Kasman ◽  
Kamila Mekenbayeva
Keyword(s):  
Technical Efficiency ◽  
Productivity Growth ◽  
Commercial Banks ◽  
Economies Of Scale ◽  
Banking Industry ◽  
Malmquist Index ◽  
Data Envelopment ◽  
Factor Productivity ◽  
Second Stage ◽  
Efficiency And Productivity

This paper investigates the technical efficiency and productivity of Kazakh commercial banks over the period 2000–2013. Non-parametric approaches, namely the Data Envelopment Analysis and the Malmquist index are employed to calculate technical efficiency and productivity. In addition, a second-stage regression is also estimated to identify the determinants of efficiency. The results indicate that banks in Kazakhstan operate below their optimum levels, with larger banks being more efficient than smaller ones. The results also indicate the presence of economies of scale for banks of all sizes. The efficiency of banks is found to be significantly and positively related to profitability, capitalisation, bank size, and liquidity. The results further indicate that Kazakh banks seem to have experienced a significant productivity growth over the sample period.

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.

Efficiency and productivity performance of zakat funds in Algeria

2018 ◽  
Vol 11 (3) ◽  
pp. 474-494 ◽  
Author(s):  
Chams-Eddine Djaghballou ◽  
Mohamed Djaghballou ◽  
Mousa Larbani ◽  
Azhar Mohamad
Keyword(s):  
Design Methodology ◽  
Operating Performance ◽  
Malmquist Productivity Index ◽  
Productivity Index ◽  
Scale Efficiency ◽  
Data Envelopment ◽  
Efficiency Change ◽  
Output Data ◽  
Content Type ◽  
Efficiency And Productivity

Purpose The purpose of this study is to examine the efficiency and productivity performance of zakat funds managed by Directorates of Religious Affairs and Endowments (DRAE) in Algeria. Design/methodology/approach In this study, the authors employ data envelopment analysis and measure Malmquist Productivity Index for DRAE’s input and output data spanning from 2003 to 2013. Findings The authors find that total factor productivity has increased sharply for all zakat funds, mainly due to a technical rather than efficiency change. Further decomposition of the efficiency change into its pure technical and scale efficiency components suggests that the pure efficiency is a more important source of efficiency change than the scale efficiency component, meaning that zakat funds rely on technical aspects to gain efficiency. Originality/value The findings of this study are expected to contribute considerably to the existing knowledge on the operating performance of zakat funds in Algeria.

Measuring the performance of the Indian banking industry: data envelopment window analysis approach

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Shakeb Akhtar ◽  
Mahfooz Alam ◽  
Mohd Shamim Ansari
Keyword(s):  
Commercial Banks ◽  
Banking Industry ◽  
Foreign Banks ◽  
Analysis Approach ◽  
Scale Efficiency ◽  
Data Envelopment ◽  
Content Type ◽  
Window Analysis ◽  
Indian Banks ◽  
The Individual

PurposeThis study aims to empirically evaluate the performance of commercial banks operating in India.Design/methodology/approachThe efficiency of the commercial banks is evaluated using the data envelopment analysis (DEA) approach. We measure the technical, pure technical and scale efficiency of the sampled conventional banks using the input-oriented model. We employed an extended DEA window analysis approach based on a panel sample of 47 banks in the Indian scenario. The period of study is from 2009 to 2018.FindingsThe results obtained from CRS and VRS measures envisage that Indian banks have failed to manage their inputs efficiently and convert them into outputs. It implies that Indian banks do not operate at an optimum level. Moreover, the results show that public banks exhibit superior efficiency scores followed by private and foreign banks. Apart from the aggregate sector level, we also investigate the performance of Indian banks at the individual level for in-depth analysis. The individual bank-level analysis reports that the public sector banks (PSBs) are the most efficient followed by foreign banks, whereas, the least efficient are the private banks.Research limitations/implicationsThe findings of our study have implications for government, financial institutions and policymakers to access the verve and flexibility of the Indian banking system. The government should consider restructuring inefficient banks to enhance overall performance. This can be considered by improvement in managerial efficiency, efficient allocation of scarce resources and appropriate scale of operation. However, the findings of the study should be interpreted in light of the period of study for the banks being operational (as we filter out banks that ceased to exist) in India and empirical methods employed. The results may vary if alternative measures are used.Originality/valueThe present paper investigates the efficiency of the Indian banking sector employing the Data Envelopment Window Analysis (DEWA) technique. To the best of our knowledge, the present study is perhaps the first one to employ the DEWA measure on the Indian banking industry to gauge their performance over time.

scholarly journals A Study on the Efficiency and Productivity of County-Level Hospitals from the Perspective of Regional Contrast in China: Data Envelopment Analysis and the Malmquist Index

2020 ◽  
Author(s):  
Peng Li ◽  
Cunhui Wang ◽  
Nian-nian Li ◽  
Heng Wang
Keyword(s):  
Technical Efficiency ◽  
Malmquist Index ◽  
Public Hospitals ◽  
Scale Efficiency ◽  
Eastern Region ◽  
Data Envelopment ◽  
Management Innovation ◽  
County Level ◽  
Output Indicators ◽  
Efficiency And Productivity

Abstract BackgroundCounty-level public hospitals play an important role in China's medical tertiary health care network. Since a new round of medical reforms occurred in 2009, county-level public hospitals have conducted continuous exploration and reforms. To analyze the efficiency and productivity of 36 county-level public hospitals based three provinces in China.Methods.We randomly selected 12 county-level hospitals from each 3 provinces based on economic levels and regional differences in China, finally, a total of 36 county-level hospitals were chosen, and a self-made questionnaire was used to investigate hospital operations for collecting data from 2011 to 2015. 2011–2015 is the twelfth five-year period of China's national economic and social development. Four input indicators and three output indicators were selected. Data envelopment analysis and the Malmquist index methods were used to measure the efficiency and productivity by the key indicators for each region.Results.On average, four input indicators in three regions have continued to grow from 2011 to 2015. The output in the three regions is directly proportional to the upward trend in inputs. On average, the three output indicators of hospitals in the eastern region are higher than the central and western regions. The technical efficiency of county-level public hospitals in the central, eastern, and western regions of China were on an upward trend, and the number of the technical efficiency, the pure technical efficiency, and the scale efficiency values reaching 1 in the three regions was more than half, respectively. The average of total factor productivity change for 2011–2015 in the central, eastern, and western regions was 1.016, 0.997, and 0.930, respectively.Conclusions.The efficiency of the central Chinese region was mainly affected by pure technical efficiency; however, scale efficiency changed to affect the efficiency of the eastern and western hospitals in 2015. The increase in production efficiency in the central region was driven by the technical efficiency. In the future hospital management, management innovation needs to be strengthened. The decline in productivity in the eastern region was due to the decline in the technical efficiency. At present, the eastern region pays attention to management innovation, but it is necessary to be alert to the adverse consequences of the expansion of hospital scale. The decline in productivity in the western region was due to the decline in the technological efficiency and technical efficiency. The hospitals should strengthen hospital management and blind scale expansion. Financial subsidies in the western region have a significant role in promoting the development of hospitals. The internal management innovation of hospitals in the eastern region has a positive effect on the technical efficiency of hospitals. The medical reform measures in the central region have positively promoted the efficiency of hospitals.

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 Efficiency and Productivity Evaluation of the Moroccan Judicial System

2021 ◽  
Vol 17 (27) ◽  
pp. 282
Author(s):  
Yassine Achenchabe ◽  
Mohammed Akaaboune
Keyword(s):  
Technical Change ◽  
Economies Of Scale ◽  
Returns To Scale ◽  
Malmquist Index ◽  
Scale Efficiency ◽  
Productivity Change ◽  
Judicial Reform ◽  
Data Envelopment ◽  
Efficiency And Productivity ◽  
Positive Effect

This paper focuses on measuring the efficiency and productivity change in 110 Moroccan courts between 2013 and 2018, which is the period of implementation of the judicial reform. The study also measures the technical and scale efficiency using the Data Envelopment Analysis method under output orientation. The Malmquist index was used to measure the productivity change decomposed into efficiency and technical change. The results show a low level of courts efficiency of 53.2%, with increasing returns to scale for most courts except administrative ones. The total factor productivity of courts shows an improvement of 6.3%, mainly due to technical change, except for the commercial courts whose productivity deteriorated during the study period. These results show the positive effect of the reform. Courts still have a margin for improving their efficiency by increasing inputs in order to benefit from economies of scale or by improving judges' productivity.

scholarly journals Investigation on firm efficiency: evidence from selected Asia-Pacific countries

2018 ◽  
Vol 25 (8) ◽  
pp. 3062-3080 ◽  
Author(s):  
Khar Mang Tan ◽  
Fakarudin Kamarudin ◽  
Amin Noordin Bany-Ariffin ◽  
Norhuda Abdul Rahim
Keyword(s):  
Technical Efficiency ◽  
Small Firms ◽  
Banking Sector ◽  
Profit Maximization ◽  
Asia Pacific ◽  
Scale Efficiency ◽  
Scale Level ◽  
Firm Efficiency ◽  
Content Type ◽  
Parametric Data

Purpose The purpose of this paper is to examine the firm efficiency or technical efficiency (TE), pure technical efficiency (PTE) and scale efficiency (SE) in the selected developed and developing Asia-Pacific countries. Design/methodology/approach The sample consists of a sum of 700 firms in selected developed and developing Asia-Pacific countries over the period from 2009 to 2015. The non-parametric data envelopment analysis under the production approach is used to investigate firm efficiency. Findings On average, this paper discovers that the firms in selected Asia-Pacific countries are moderately efficient. Scale inefficiency (SIE) is found to be the dominant source of firms’ technical inefficiency. The analysis of return to scale shows that the large firms tend to operate at decreasing return to scale level, while the small firms tend to operate at increasing return to scale level. Practical implications The findings from this paper provide significant insights to the policy makers and firm managers in promoting the efficient firms of Asia-Pacific countries. Originality/value The present paper conducts a critical analysis on return to scale in the firms sector of Asia-Pacific context, which is ignored by the past studies on firm efficiency since the analysis of return to scale is mostly emphasized on banking sector. The precise nature of SIE is important for a firm to be efficient in achieving the firm’s primary goals of profit maximization and sustaining market competitiveness.

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