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Productivity Change in Taiwan's Farmers' Credit Unions: A Nonparametric Risk-Adjusted Malmquist Approach

Author

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  • Chen, Po-Chi
  • Yu, Ming-Miin
  • Chang, Ching-Cheng
  • Hsu, Shih-Hsun

Abstract

This article proposes an extended three-stage DEA methodology similar to Fried et al. (2002) to improve the measurement of productivity growth then the assumption of free disposability of undesirable outpu t does not apply. A directional distance function is used to construct adjusted Malmquist-Luenberger productivity indexes which simultaneously account for the impacts of undesirable outputs, environmental variables, and statistical noise. Panel data for 264 farmers' credit unions (FCUs) in Taiwan covering the 1998-2000 period are employed to illustrate the advantages of this method. On average, the productivity of Taiwan's FCUs is found to have deteriorated over the 1998-2000 period. Although an improvement in efficiency has been observed, the major reason for the deterioration is found to be due to the regression of techno logy.

Suggested Citation

  • Chen, Po-Chi & Yu, Ming-Miin & Chang, Ching-Cheng & Hsu, Shih-Hsun, 2006. "Productivity Change in Taiwan's Farmers' Credit Unions: A Nonparametric Risk-Adjusted Malmquist Approach," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25665, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae06:25665
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    File URL: http://purl.umn.edu/25665
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    References listed on IDEAS

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    1. Fare, Rolf, et al, 1989. "Multilateral Productivity Comparisons When Some Outputs Are Undesirable: A Nonparametric Approach," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 90-98, February.
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