Labor-use efficiency in Indian banking: A branch-level analysis
AbstractThis paper uses data envelopment analysis to measure labor-use efficiency of individual branches of a large public sector bank with a sizable network of branches across India. We find considerable variation in the average levels of efficiency of bank branches across the four metropolitan regions considered in this study. In this context, we introduce the concept of area or spatial efficiency for each region relative to the nation as a whole. Our findings suggest that the policies, procedures, and incentives handed down from the corporate level cannot fully neutralize the detrimental influence of the local work culture across different regions. Most of the potential reduction in labor cost appears to be coming from possible downsizing in the clerical and subordinate staff. Our analysis identifies branches that operate at very low levels of labor-use efficiency and possible candidates for increased supervision and control.
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Bibliographic InfoArticle provided by Elsevier in its journal Omega.
Volume (Year): 37 (2009)
Issue (Month): 2 (April)
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Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/375/description#description
Other versions of this item:
- Abhiman Das & Subhash C. Ray & Ashok Nag, 2005. "Labor-Use Efficiency in Indian Banking: A Branch Level Analysis," Working papers 2005-04, University of Connecticut, Department of Economics.
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L89 - Industrial Organization - - Industry Studies: Services - - - Other
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
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