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A New Malmquist Productivity Index Based On Semi-Discretionary Variables With An Application To Commercial Banks Of China

Author

Listed:
  • GONG-BING BI

    (School of Management, University of Science and Technology of China, Hefei 230026, China)

  • JING-JING DING

    (School of Management, University of Science and Technology of China, Hefei 230026, China)

  • YAN LUO

    (School of Management, University of Science and Technology of China, Hefei 230026, China)

  • LIANG LIANG

    (School of Management, University of Science and Technology of China, Hefei 230026, China)

Abstract

The Malmquist productivity index studies productivity change, that is, the technical progress or regress together with the efficiency changes over time. In a nonparametric framework, the index can be estimated by data envelopment analysis (DEA). In this paper, first all inputs are divided into three groups, namely, discretionary variables, nondiscretionary variables, and semi-discretionary variables, and then a mixed integer linear model is proposed to deal with semi-discretionary variables. The proposed models consider not only the properties of semi-discretionary inputs, but also the relationship between them and other inputs. By introducing such a relationship and the preferences of decision-makers (DMs), the models aid DMs in generating efficiency scores and finding proper benchmarking points. Finally, the Malmquist productivity index combining the proposed model is computed and illustrated by an empirical application to the evaluation of 17 branches of Bank of China in Anhui Province. The results show a slight decrease in productivity during the year 2007/2008, and the productivity change positively during 2008/2009 due largely to efficiency increase.

Suggested Citation

  • Gong-Bing Bi & Jing-Jing Ding & Yan Luo & Liang Liang, 2011. "A New Malmquist Productivity Index Based On Semi-Discretionary Variables With An Application To Commercial Banks Of China," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 10(04), pages 713-730.
  • Handle: RePEc:wsi:ijitdm:v:10:y:2011:i:04:n:s0219622011004531
    DOI: 10.1142/S0219622011004531
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    Cited by:

    1. Bojiang Yang & Youliang Zhang & Hongjun Zhang & Rui Zhang & Baoyu Xu, 2016. "Factor-specific Malmquist productivity index based on common weights DEA," Operational Research, Springer, vol. 16(1), pages 51-70, April.
    2. Michael C. Nwogugu, 2020. "Decision-Making, Sub-Additive Recursive "Matching" Noise And Biases In Risk-Weighted Stock/Bond Index Calculation Methods In Incomplete Markets With Partially Observable Multi-Attribute Pref," Papers 2005.01708, arXiv.org.

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