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Measuring the Development of Efficiency and Productivity of Banks in the Visegrad Group: An Application of Hicks-Moorsteen Total Factor Productivity index

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  • Lucie Chytilová

    (Technical University of Ostrava, Czech Republic)

Abstract

The research on the banking efficiency all around the world has been one of the main topics for the international financial sectors over the last years. The special case is in Europe. Some of the countries are in the European Union. The European Commission creates the rules for safer and sounder financial sector in these countries. In the past, these rules brought a lot of controversy whether they help to all countries in the European Union or just some of them. The purpose of this article is to determine the development of different types of efficiencies for banking industry in the Visegrad Group. Generally, the development is measured by the Malmquist approach. Different type of index is used in this article, more precisely the Hicks-Moorsteen Total Factor Productivity index. It is one of the alternative indexes. The results have showed that the model with the variable return to scale assumption is better for the use in banking industry in the Visegrad Group, as this model is more precise about the results.

Suggested Citation

  • Lucie Chytilová, 2016. "Measuring the Development of Efficiency and Productivity of Banks in the Visegrad Group: An Application of Hicks-Moorsteen Total Factor Productivity index," European Journal of Business Science and Technology, Mendel University in Brno, Faculty of Business and Economics, vol. 2(1), pages 53-63.
    • Handle: RePEc:men:journl:v:2:y:2016:i:1:p:53-63
    DOI: 10.11118/ejobsat.v2i1.29
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    References listed on IDEAS

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    1. Tim J. Coelli & D. S. Prasada Rao, 2005. "Total factor productivity growth in agriculture: a Malmquist index analysis of 93 countries, 1980–2000," Agricultural Economics, International Association of Agricultural Economists, vol. 32(s1), pages 115-134, January.
    2. George J. Benston, 1965. "Branch Banking And Economies Of Scale," Journal of Finance, American Finance Association, vol. 20(2), pages 312-331, May.
    3. Arjomandi, Amir & Valadkhani, Abbas & O’Brien, Martin, 2014. "Analysing banks’ intermediation and operational performance using the Hicks–Moorsteen TFP index: The case of Iran," Research in International Business and Finance, Elsevier, vol. 30(C), pages 111-125.
    4. Sealey, Calvin W, Jr & Lindley, James T, 1977. "Inputs, Outputs, and a Theory of Production and Cost at Depository Financial Institutions," Journal of Finance, American Finance Association, vol. 32(4), pages 1251-1266, September.
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    More about this item

    Keywords

    CCR model; VRS model; the Visegrad group; Hicks-Moorsteen TFP index; efficiency;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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