The Application of Data Envelopment Analysis Based Malmquist Total Factor Productivity Index: Empirical Evidence in Turkish Banking Sector
AbstractThe objective of this study is to measure the total factor productivity and the changes in components of the total factor productivity generated by the banks in Turkish Banking Sector (TBS) during the period of 2004-2009. Based on these measurements, we quantify the production efficiency of the banks. To that end, the total factor productivity is taken as an initial point, and various performance comparisons are made both within the specified three sub-groups and among all deposit banks in TBS. Within the context of performance measurement, we use input and output variables to test technical efficiency index, which represents a combination of change in technical efficiency and in technology, and to test a change in total factor productivity index which comprises a change in pure technical efficiency and scale efficiency. In the calculation of these indexes, Malmquist total factor productivity index method is employed. Computed indexes provide us with the opportunity to make performance comparisons in order to assess which group and bank have comparatively highest performance among the groups and banks included in this study. When we consider the effects of 2007-2008 global crises on Turkish economy, notably on TBS, calculating the performance change ratio for previous periods or estimating the same for the following periods becomes vital in terms of enduringly changing and developing banks. The growing competition in TBS forces banks to attach more importance to productivity factor for sustainable growth purposes. In this regard, Malmquist total factor productivity index gives us the opportunity to quantify the changes in total factor productivity over the years. Accordingly, this study applies group analysis to determine which group is working efficiently. To do this, Malmquist total factor productivity index requires the use of panel data and depicts efficiency changes by years, representing crucial information for us to produce policy implications. In brief, the test results obtained by this study indicate that the foreign banks, thanks to positive changes in their technology, technical efficiency and total factor productivity, are more effective than other private and state banking groups.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Savez ekonomista Vojvodine, Novi Sad, Serbia in its journal Panoeconomicus.
Volume (Year): 60 (2013)
Issue (Month): 2 (April)
Contact details of provider:
Web page: http://www.panoeconomicus.rs/
Data envelopment analysis; Malmquist total factor productivity index; Banks;
Find related papers by JEL classification:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- C40 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - General
- C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fethi, Meryem Duygun & Pasiouras, Fotios, 2010. "Assessing bank efficiency and performance with operational research and artificial intelligence techniques: A survey," European Journal of Operational Research, Elsevier, vol. 204(2), pages 189-198, July.
- Saadet Kasman & Adnan Kasman, 2011. "Efficiency, Productivity and Stock Performance: Evidence from the Turkish Banking Sector," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 58(3), pages 355-372, September.
- Coelli, T J, 1996. "Measurement of Total Factor Productivity Growth and Biases in Technological Change in Western Australian Agriculture," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(1), pages 77-91, Jan.-Feb..
- Kumar, Surender, 2004. "Decomposition of total factor productivity growth: A regional analysis of Indian industrial manufacturing growth," Working Papers 04/22, National Institute of Public Finance and Policy.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ivana Horvat) The email address of this maintainer does not seem to be valid anymore. Please ask Ivana Horvat to update the entry or send us the correct address.
If references are entirely missing, you can add them using this form.