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Technology-based total factor productivity and benchmarking: New proposals and an application

  • Epure, Mircea
  • Kerstens, Kristiaan
  • Prior, Diego

The present study fills a gap between the benchmarking literature and multi-output based efficiency and productivity studies by proposing a benchmarking framework to analyze total factor productivity (TFP). Different specifications of the Hicks-Moorsteen TFP index are tailored for specific benchmarking perspectives: (1) static, (2) fixed base and unit, and (3) dynamic TFP change. These approaches assume fixed units and/or base technologies as benchmarks. In contrast to most technology-based productivity indices, the standard Hicks-Moorsteen index always leads to feasible results. Through these specifications, managers can assess different facets of the firm's strategic choices in comparison with firm-specific relevant benchmarks and thus have a broad background for decision making. An empirical application for the Spanish banking industry between 1998 and 2006 illustrates the managerial implications of the proposed framework.

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Article provided by Elsevier in its journal Omega.

Volume (Year): 39 (2011)
Issue (Month): 6 (December)
Pages: 608-619

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Handle: RePEc:eee:jomega:v:39:y:2011:i:6:p:608-619
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