Efficiency and Productivity Analysis of Indonesian Regional Development Banks: Multi-Stage Dea Approach and Malmquist Productivity Index

Abstract

This research is intended to empirically examine the efficiency and productivity change of 26 regional development banks (BPDs) in Indonesia in 2011-2016 using a non-parametric approach of data envelopment analysis (DEA). This research was started by determining input and output variables based on three approaches, i.e., intermediation, operation, and the asset approach. The Multi-stage DEA was adopted to generate the efficiency score, and the inputorientated variable return to scale (VRS) assumption is specified in data analysis. The Malmquist Productivity Index (MPI) was used to measure the total factor productivity change indicating the improvement or deterioration of performance of BPDs over time. The multi-stage DEA result shows a significant difference in the number of efficient BPDs using the three approaches. MPI shows that the highest productivity increase was in the asset approach of 84.0%, supported by the increase in efficiency change and technological change. While in intermediation and operation approach, the increase was only 44.0% and 36.0%, depending on the increase in efficiency change and scale efficiency change. This research suggests that BPDs need to invest more in technology to increase firm efficiency.

Personnel Expenses and Productivity Change in Peruvian Stock Mining Companies

“…Finally, it was seen that also Scale efficiency was an important factor for Productivity Index as the research made by Yonnedi & Rahman Panjaitan (2019) in the Indonesian regional banks.…”

Operational Efficiency and Productivity Change in Cross-country Commercial Banking Industries: Evidence From South Asia

“…In the first two decades after DEA introduction as an efficiency measurement tool, it was primarily used in the USA and European countries ( [18], [29], [36], [62], [70]). However, in the 21 st century, DEA has been widely used as a famous performance evaluation tool in commercial banking around the globe ( [12], [16], [65], [66], [79], [80]).…”

Efficiency And Productivity Of Coffee Agroindustry In Sungai Penuh City; Dea Approach And The Malmquist Index

“…Generally, DEA is widely used to measure the level of technical efficiency, scale, and economy of the banking industry and other financial institutions. As has been done by , Yonnedi et al (2019). Over time, DEA methods also began to be widely used in measuring non-bank efficiency levels, such as hospitals, small and medium enterprises, educational institutions, and nonprofits ; ( Manongga, 2014;Quayes, 2014;Fatimah et al 2017;Rustyani et al 2018;Suryani et al 2019;Fathurrahman et al 2019;Permatasari et al 2019;Ariyani, 2020) The purpose of this research is First, looking at the general efficiency of the coffee agroindustry in Sungai Penuh City from 2015-2019.…”