Measuring and decomposing productivity change using Hicks-Moorsteen index numbers: evidence from Indian banks

Arora, Hitesh; Arora, Padmasai

doi:10.1504/ijpqm.2013.050569

Cited by 5 publications

(2 citation statements)

References 52 publications

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“…Several researchers used the H-M index to analyse the efficiency of Indian banks. While Arora and Arora (2013) find a stagnancy in the productivity performance of Indian banks, Sharma and Dalip (2014) found that the technological change across banks is the primary driver of total factor productivity in case of Indian banks. The Fare-Primont (F-P) index of productivity performance is another method which improves upon the Malmquist index (O'Donnell, 2012(O'Donnell, , 2014.…”

Section: Operationalmentioning

confidence: 99%

Operational and policy efficiency: a comparison between public and private Indian banks

Kundu

Banerjee

2021

IJPPM

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PurposeThis paper introduces the concept of policy efficiency of banks as their efficiency in implementing the government's policies. It further compares the Indian public sector banks (PSBs) and private sector banks (PVBs) on two efficiency paradigms, operational efficiency and policy efficiency.Design/methodology/approachA three-stage analysis is carried out on data collected for 19 PSBs and 16 PVBs for ten years. Non-radial DEA with slack-based measure (SBM) is used to obtain efficiency scores of the banks for the two efficiency paradigms. The efficiency scores and the changes in efficiency and Malmquist index are further analysed by Tobit regression and seemingly unrelated regression (SUR) models.FindingsPVBs are found to be more operationally efficient than PSBs. On the contrary, PSBs are found to be more policy efficient. Among the PSBs, the older and larger banks performed better in both the paradigms. Though Indian banks have become more operational and policy efficient over the years, the rate of improvement is slowing down.Practical implicationsResults imply that evaluating banks, especially PSBs, only on their operational efficiency is myopic. Their efficacies must also be measured by the roles they play on social and policy front. The loss of efficiency of Indian PSBs in a competitive environment should provoke thoughts of reforms. The study suggests that the proposed merger of PSBs to form large banks might be fruitful.Originality/valueThe study contributes to the literature by introducing the measure of policy efficiency. It shows that the Indian PSBs are indispensable as vehicles of government policy implementation.

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Section: Operationalmentioning

confidence: 99%

Operational and policy efficiency: a comparison between public and private Indian banks

Kundu

Banerjee

2021

IJPPM

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“…Some important applications of this index include O'Donnell (2010a;2012a;2012b) and Hoang (2011) in the agricultural sector, Simões and Marques (2012) in the waste sector and Epure et al (2011), Arjomandi et al (2012), and Arora and Arora (2012;2013) in the context of the banking sector. Iranian public banks (6 commercial and 4 specialised banks) during the period 1997-1999, and found that the specialised banks were considerably more technically efficient than the commercial banks.…”

Section: Literature Review Of Hicks-moorsteen Studies On Banking Prodmentioning

confidence: 99%

Analysing banks’ intermediation and operational performance using the Hicks–Moorsteen TFP index: The case of Iran

Arjomandi

Valadkhani

O’Brien

2014

Research in International Business and Finance

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In order to analyse the impact of policy reforms on the performance of the banking sector in Iran we present a decomposition of the Hicks-Moorsteen Total Factor Productivity (TFP). This entails a comparison of both the intermediate and operating performances of different types of banks in the pre-and post-reform eras. Our results show that under the intermediation approach, state-owned banks (public banks) were considerably more efficient than private banks in the post-regulation period. In contrast, under the operating approach, private banks were fully technically efficient and mix efficient in both pre and post-reform eras. This paper highlights the importance of analysing performance from multiple perspectives. The findings reflect public banks' mission to maximise loans to target groups while private banks are motivated more by financial profit.

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Comparing Malmquist and Hicks–Moorsteen productivity indices: Exploring the impact of unbalanced vs. balanced panel data

Kerstens

Woestyne

2014

European Journal of Operational Research

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Measuring and decomposing productivity change using Hicks-Moorsteen index numbers: evidence from Indian banks

Cited by 5 publications

References 52 publications

Operational and policy efficiency: a comparison between public and private Indian banks

Operational and policy efficiency: a comparison between public and private Indian banks

Analysing banks’ intermediation and operational performance using the Hicks–Moorsteen TFP index: The case of Iran

Comparing Malmquist and Hicks–Moorsteen productivity indices: Exploring the impact of unbalanced vs. balanced panel data

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