IDEAS home Printed from
   My bibliography  Save this article

A parametric measure of productivity change from hyperbolic distance function: Application to the Vietnamese banking industry


  • Ha Vu
  • Sean Turnell


This paper introduces a new parametric measure of productivity change using the hyperbolic distance function. More specifically, the paper first estimates a stochastic translog hyperbolic distance function, which satisfies regularity conditions, using the Bayesian approach. Then it derives an expression to measure scale efficiency from this estimated function. Finally, it shows measurements of three components of productivity change. The first component, technical efficiency change, is computed by a ratio of hyperbolic distances between two consecutive periods. The second component, technological change, is measured as a ratio of distances along a chosen input-output vector. The third component, scale efficiency change, is determined by a ratio of scale efficiency estimates between two consecutive periods. This new measure is then applied to investigate productivity change of the Vietnamese banking sector during the 2000–2006 period. The empirical results show that the Vietnamese banking industry experiences modest productivity growth. The thrust of this growth is technological progress, and to some degree technical change, whereas scale efficiency change contributes negatively to productivity growth. Moreover, foreign banks are found to have the highest productivity growth.

Suggested Citation

  • Ha Vu & Sean Turnell, 2012. "A parametric measure of productivity change from hyperbolic distance function: Application to the Vietnamese banking industry," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 2(5), pages 1-4.
  • Handle: RePEc:spt:apfiba:v:2:y:2012:i:5:f:2_5_4

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Berger, Allen N. & Mester, Loretta J., 1997. "Inside the black box: What explains differences in the efficiencies of financial institutions?," Journal of Banking & Finance, Elsevier, vol. 21(7), pages 895-947, July.
    2. Berg, Sigbjorn Atle & Forsund, Finn R & Jansen, Eilev S, 1992. " Malmquist Indices of Productivity Growth during the Deregulation of Norwegian Banking, 1980-89," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(0), pages 211-228, Supplemen.
    3. Fadzlan Sufian & Muzafar Shah Habibullah, 2010. "Developments in the efficiency of the Thailand banking sector: a DEA approach," International Journal of Development Issues, Emerald Group Publishing, vol. 9(3), pages 226-245, September.
    4. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    5. Tortosa-Ausina, Emili & Grifell-Tatje, Emili & Armero, Carmen & Conesa, David, 2008. "Sensitivity analysis of efficiency and Malmquist productivity indices: An application to Spanish savings banks," European Journal of Operational Research, Elsevier, vol. 184(3), pages 1062-1084, February.
    6. Caves, Douglas W & Christensen, Laurits R & Diewert, W Erwin, 1982. "The Economic Theory of Index Numbers and the Measurement of Input, Output, and Productivity," Econometrica, Econometric Society, vol. 50(6), pages 1393-1414, November.
    7. Paradi, Joseph C. & Rouatt, Stephen & Zhu, Haiyan, 2011. "Two-stage evaluation of bank branch efficiency using data envelopment analysis," Omega, Elsevier, vol. 39(1), pages 99-109, January.
    8. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
    9. Bhattacharyya, Arunava & Lovell, C. A. K. & Sahay, Pankaj, 1997. "The impact of liberalization on the productive efficiency of Indian commercial banks," European Journal of Operational Research, Elsevier, vol. 98(2), pages 332-345, April.
    10. Leightner, Jonathan E. & Lovell, C. A. Knox, 1998. "The Impact of Financial Liberalization on the Performance of Thai Banks," Journal of Economics and Business, Elsevier, vol. 50(2), pages 115-131, March.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spt:apfiba:v:2:y:2012:i:5:f:2_5_4. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Eleftherios Spyromitros-Xioufis). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.