A comparative analysis of profit inefficiency and productivity convergence between Taiwanese and Chinese banks

To insure a proper and meaningful productivity assessment of DMUs with different production technologies, this article develops a difference-based profit metafrontier Luenberger productivity indicator. Adopting the proposed model, we empirically measure the profit inefficiency and examine the profit productivity convergence for samples banks consisting of 31 Taiwanese banks and 50 Chinese city banks over 2010–2014. Empirical results show that Chinese banks perform better in profit efficiency than Taiwanese banks. While Chinese banks have better technology in profit creation than Taiwanese banks, the latter may reap much higher profit gain than the former if they can adopt the profit metafrontier. The results of the profit metafrontier Luenberger productivity indicator analysis show that both Chinese and Taiwanese banks have experienced declines in profit productivity. However, the results also indicate a divergence in productivity growth for Chinese city banks and a convergent productivity growth for Taiwanese banks. JEL CLASSIFICATION: D20, G21, P34

Hotel productivity: A robust Luenberger productivity indicator

The article presents a robust version of the Luenberger productivity indicator. The proposed productivity indicator is less sensitive to potential outliers and extreme values. We apply the robust productivity index on a sample of 176 hotels operating in the Canary Islands over the period from 2004 to 2013. The results indicate that hotels have increased their productivity levels over the examined time period. In relation to their productivity levels, it is also evident that hotels have demonstrated strong resilience during the global financial crisis. Finally, it is evident that hotels have been recovered quickly from the global financial crisis based mainly on the ability to increase their technological change levels.