Malmquist Productivity Index Research Articles

Analyzing the efficiency of the Indian hotel industry using the Malmquist DEA approach

PurposeThe purpose of this paper is to determine the most efficient hotels in the Indian hotel industry, the competitive positioning of these hotels, and the factors that affect their efficiency change.Design/methodology/approachThis study conducts a two-stage analysis and uses data envelopment analysis (DEA) and Global Malmquist productivity index (MPI) approach in the first stage to calculate the managerial performance of a panel of 63 Indian hotels in 2019–2020 and their efficiency change from 2009–2010 to 2019–2020. Bootstrapped generalized least square (GLS) approach is applied in the second stage to evaluate the impact of contextual variables on efficiency change.FindingsUsing the results of the first stage analysis, the authors categorized the 63 Indian hotels into 7 distinct clusters. These clusters represent different levels of competitiveness and pace of growth. The GLS regression reveals a U-shaped relationship between hotel size and efficiency change and a negative relationship between pro social investments and efficiency.Originality/valueThis is the first study in the hotel industry that has used global MPI as a measure of efficiency change in the first stage and GLS in the second stage. In the Indian context, to the best of authors’ knowledge, no such study exists.

Efficiency and Productivity of Zakat Management Organization Before and During Pandemic Covid-19

This study investigates the efficiency and productivity of zakat institutions in Indonesia before and during the Covid-19 pandemic using Data Envelopment Analysis (DEA) and the Malmquist Productivity Index (MPI). Our findings reveal that three out of the five zakat institutions exhibited efficiency at different periods. Notably, LAZ Al Azhar demonstrated consistent efficiency both before and during the pandemic, while LAZISNU was efficient in 2019-2020 but experienced inefficiency in 2021. Additionally, LAZ Rumah Zakat exhibited an increase in efficiency in 2020 but regressed to inefficiency in 2021, primarily attributed to excessive distribution of ZIS funds in each institution. These findings highlight the urgent need for standardization and optimization of zakat management to unlock its immense potential for equitable distribution and impact during times of crisis, offering valuable insights for policymakers and zakat institutions globally.
 Highlights:
 
 Standardization and Optimization: The absence of standardized zakat management contributes to suboptimal collection and distribution of zakat funds in Indonesia.
 DEA and MPI Analysis: Data Envelopment Analysis (DEA) and the Malmquist Productivity Index (MPI) serve as effective methods to evaluate the operational efficiency and productivity of zakat institutions.
 Implications for Global Zakat Institutions: Understanding the dynamics of zakat efficiency during crises can offer valuable insights for similar institutions worldwide to enhance their distribution impact and resource management.
 
 Keywords: Zakat institutions, Efficiency, Productivity, Indonesia, Covid-19 pandemic.

Efficiency and Productivity of Zakat Management Organization Before and During Pandemic Covid-19

This study investigates the efficiency and productivity of zakat institutions in Indonesia before and during the Covid-19 pandemic using Data Envelopment Analysis (DEA) and the Malmquist Productivity Index (MPI). Our findings reveal that three out of the five zakat institutions exhibited efficiency at different periods. Notably, LAZ Al Azhar demonstrated consistent efficiency both before and during the pandemic, while LAZISNU was efficient in 2019-2020 but experienced inefficiency in 2021. Additionally, LAZ Rumah Zakat exhibited an increase in efficiency in 2020 but regressed to inefficiency in 2021, primarily attributed to excessive distribution of ZIS funds in each institution. These findings highlight the urgent need for standardization and optimization of zakat management to unlock its immense potential for equitable distribution and impact during times of crisis, offering valuable insights for policymakers and zakat institutions globally.
 Highlights:
 
 Standardization and Optimization: The absence of standardized zakat management contributes to suboptimal collection and distribution of zakat funds in Indonesia.
 DEA and MPI Analysis: Data Envelopment Analysis (DEA) and the Malmquist Productivity Index (MPI) serve as effective methods to evaluate the operational efficiency and productivity of zakat institutions.
 Implications for Global Zakat Institutions: Understanding the dynamics of zakat efficiency during crises can offer valuable insights for similar institutions worldwide to enhance their distribution impact and resource management.
 
 Keywords: Zakat institutions, Efficiency, Productivity, Indonesia, Covid-19 pandemic.

Spatial spillover effect of China's tax and fee reduction policies on independent research and development evidence from dynamic Spatial Dubin analysis.

To test the driving effect of China's tax and fee reduction policies on independent innovation, we established a model of Dynamic Spatial Durbin (SDM) and introduced DMSP/OLS night lighting data and Malmquist productivity index for partial differential decomposition. We found that: (1) Affected by the tax and fee reduction policies, the local province tends to increase the level of independent innovation in the short term, while neighboring provinces tend to purchase and rely on foreign technology; (2) In the long term, the tax and fee reduction policies do not significantly increase the level of independent innovation in local and neighboring regions; (3) There is a strategic choice behavior of local government between political promotion incentives and promoting independent innovation; (4) The policy externality of tax reduction and fee reduction has a two-way feedback effect. We conclude that: (1) The spatial agglomeration characteristics of tax and fee reduction policies require the government to fully consider the local innovation and economic foundation, and break the resource endowment of administrative divisions; (2) The spatial feedback feature of the tax and fee reduction policies requires the government to focus on the two-way interaction of independent innovation in the adjacent regions, rather than just one-way assistance, imitation and learning; (3) The spatial lag characteristics of tax and fee reduction policies require the government to establish a accountability system or life-long system for innovative performance evaluation. Moreover, the study fails to provide causality evidence from the spatial agglomeration and spatial time-delay.

Industrial performance of the top R&D enterprises in world-leading economies: A metafrontier approach

Faced with increasingly prominent challenges in developing a knowledge-based economy, many countries have attached great importance to research and development (R&D) activities, particularly in industrial enterprises. Considering the heterogeneity in the development background across countries, this study examines industrial R&D performance from 2016 to 2020 by comparing the productivity of the top R&D enterprises across world-leading economies and industries. The metafrontier approach and the Malmquist productivity index using data envelopment analysis and inferential statistics are employed in an empirical analysis of 1155 enterprises in the European Union (EU), the United States (US), Japan, and China operating in six different industries. The results reveal that R&D productivity has improved over time, particularly in the last year observed. Moreover, the US was the most productive, whereas China exhibited the worst productivity levels. Finally, despite Consumer Goods & Services presenting the best average R&D performance, the highest improvements are observed more recently, especially in Healthcare & Pharmaceuticals and ICT Goods & Services. The results suggest that in addition to technology gaps, the COVID-19 pandemic had important implications for the industrial performance of top R&D enterprises. The findings of this research can guide improvements in R&D efficiency and consequently facilitate evidence-based decision-making in the business sector and policymaking at the national level.

Environmental productivity assessment: An illustration with the Ecuadorian oil industry

AbstractThis paper assesses the performance of 20 Ecuadorian petroleum industry over the period 2014–2018, using the pollution‐adjusted Malmquist (PM) and Hicks–Moorsteen (PHM) productivity indices within a convex neutral analytical framework. Indeed, to the best of our knowledge, the environmental performance variation of the Ecuadorian oil industry has never been investigated hitherto in the literature. Moreover, the existing literature that analyses the environmental performance change of oil industries applied the Malmquist productivity index by considering a convex production set. However, the convexity assumption results in ignoring possible non‐linearities in the production process. Also, the performed PM and PHM in this paper are decomposed and disaggregated to provide the main drivers of both economic and polluting productivity change. Finally, the performance change assessment is carried out through a nonparametric enumerative method that is defined in the paper.

Efficiency of subnational government expenditure towards elementary education and nutrition: Bootstrap data envelopment analysis for India

The need of translating increasing outlays into better outcomes on various public programmes has attracted the attention of researchers worldwide to focus more on the quality of public spending, often assessed in terms of its efficiency. The present article is a contribution to the existing literature on the subject in that it assesses the efficiency of government expenditure of Indian states for two most basic social services—elementary education and nutrition during 2014–2015 and 2018–2019 using data envelopment analysis and Malmquist productivity index techniques, in both input‐oriented as well as output‐oriented settings under variable returns to scale assumption; it constructs the average performance index for children at elementary education and malnutrition index for women and children to utilise them as output indicators; and it adopts a robust bootstrap truncated regression procedure to avoid various econometric issues while estimating the impact of selected environmental factors on bias‐corrected inefficiency scores. The major findings of this article seem to suggest that, while states should be provided greater flexibility in their fiscal operations, they have to complement their fiscal autonomy with good governance to improve the efficiency of their spending on basic social services. Towards this end, states like Bihar, Jharkhand and those belonging to North‐Eastern and Himalayan regions need special attention with a different set of development policies.

Comparative performance of agricultural productivity in 44 SSA countries for a period of 59 years (1961-2019): A Malmquist productivity index approach.

We investigate the extent and nature of productivity growth in Sub-Saharan African countries using non-parametric frontier techniques. In this work, we examine agricultural total factor productivity (TFP) change in 44 countries in Sub-Saharan Africa (SSA), covering a period of fifty-nine (59) years (1961-2019). We make use of data drawn from the Food and Agriculture Organization of the United Nations. Due to the non-availability of reliable input price data, the study uses data envelopment analysis (DEA) to derive Malmquist productivity indices. The results demonstrate a decline in agricultural TFP growth in the region from 1961 to 2019. This notwithstanding, a general average growth was seen in some of the conventional inputs measured (land, labour, capital, and fertilizer) which are the main drivers of growth in the region. This finding implies that the increase in agricultural output over the past five decades in SSA is mainly due to an increased use of conventional inputs over time, including land, and not due to an increase in the ratio of output over inputs. As a generally acceptable and preferred indicator of technical and efficiency changes, we use TFP to calculate the Malmquist productivity index (MPI).

Sustainable production assessment of the 50 US states

Economic production is often accompanied by the depletion of natural resources and amplified environmental concerns. Mainstream economic models usually disregard such socio-environmental consequences of economic production. Therefore, there is more need of interdisciplinary methods to evaluate the sustainable productivity of nations. In this paper, we investigate the sustainable production growth of the 50 US states from 1997 to 2018. The US, as one of the largest economies and emitters of greenhouse gases, has a significant role to play in addressing the global environmental issues. The US has numerous national and international commitments and environmental policies in place, however the role of such policies on sustainable production has mostly been overlooked. We implement Data Envelopment Analysis (DEA) models based on several economic indicators and find that most states have been efficient between 1997 and 2018. We use Slack-Based Measures (SBM) to investigate individual states' capital, labor, energy, and emission performances. According to the results, capital efficiency is high while energy and emissions efficiency is low, which results in states' eco-productivity being greater than their eco-efficiency. This highlights that, while ensuring economic efficiency, many states compromise environmental focus. We further adopt Malmquist Productivity Index (MPI) to evaluate the states' productivity, efficiency, and technological change over 22 years, and document significant adverse impact of the global financial crisis on economic efficiency. Next, we apply econometric models to evaluate the impact of renewable energy and energy efficiency policies on efficiency outcomes. The test results indicate that all policies positively affect the states’ average production efficiencies and KPI measures. Overall, the findings provide valuable insights into the sustainable production growth of the US states and the impact of renewable energy and energy efficiency policies on efficiency outcomes.

Can Digital Finance Improve China’s Agricultural Green Total Factor Productivity?

The improvement of agricultural green total factor productivity (AGTFP) is crucial to achieve sustainable agricultural development. By matching China’s provincial digital financial inclusion index and agricultural production data from 2011 to 2020, and on the basis of using the DEA–Malmquist productivity index to measure AGTFP, the fixed effect model and Mesomeric effect model are used to empirically test the impact and mechanism of digital financial development on China’s AGTFP. Our research found that from 2011 to 2020, China experienced consistent improvement in AGTFP, which was largely attributed to advancements in technology. Interestingly, the AGTFP in non-major grain-producing areas surpassed that in major grain producing areas. Additionally, digital finance has proven to be an effective tool in boosting China’s AGTFP, the coverage subdimension, the depth of use subdimension and the digitization subdimension all significantly promote the AGTFP. Digital finance can significantly promote the efficiency and progress of agricultural green technology, which shows that digital finance promotes AGTFP in a “dual wheel” driven manner. However, the impact of digital finance on agricultural green technology efficiency and progress is more pronounced in major grain-producing areas than in non-major areas. The impact mechanism demonstrates that digital finance has the potential to stimulate AGTFP in two key ways. First, it can improve the mismatch of agricultural production resources; second, it can promote agricultural technology innovation. Therefore, it is necessary to further promote the rapid development of digital finance, optimize the rational allocation of financial resources, and formulate tailored digital finance development strategies to promote green development of agriculture.

Sustainable energy development in an era of geopolitical multi-crisis. Applying productivity indices within institutional framework

The term “multi-crisis” refers to the occurrence of multiple crises simultaneously, often stemming from geopolitical risks. These risks can cause societal disruption and political instability in times of uncertainty, as evidenced by the water crisis, stagflation, COVID-19, population growth, and wars. Hence, it is critical to mitigate geopolitical risks and promote peace. These risks can have significant impacts on government effectiveness, the rule of law, and political stability. Our study focuses on how the above institutional variables can influence the overall productivity of G20 economies. We measure total factor productivity (TFP) using Malmquist (MPI) and Malmquist-Luenberger (MLPI) productivity indices with a bootstrap approach. We compare the TFP of G20 economies, decomposed into G7, BRICS, and other G20 countries excluding the European Union, and find that on average, the BRICS have achieved higher TFP than the G7. The G7 performance is primarily driven by innovation, while the BRICS performance can be attributed to catching-up activities. Interestingly, weaker democratic institutions are paradoxically linked to higher productivity performance in the G20.

Cost Efficiency and Cost Productivity of TEVETA Institutes of Punjab, Pakistan: A Non-Parametric Analysis

This research paper investigates the cost efficiency and cost productivity of TEVETA institutes in Punjab, Pakistan using Data Envelopment Analysis (DEA) and COST MALMQUIST INDEX. The study uses data from 2006-2018 to analyze the impact of TEVETA reform 2011. The objective of the study is to assess the impact of the reform on productivity and efficiency of the production process. The results of the study indicate that the reforms implemented in Punjab have had a positive impact on productivity. The efficiency change, scale efficiency change, and technical change have all increased after the reforms, indicating an improvement in the overall productivity of the production process. However, the Malmquist Productivity Index has decreased slightly after the reforms, indicating a decrease in productivity. The study recommends that there is still room for improvement in resource allocation and the use of technology in the production process. The decline in allocative efficiency change suggests that resources were not allocated as efficiently as before, and the increase in the price change indicates a slight increase in the price of production inputs.

Modeling challenges affecting the performance of major ports of India

PurposeDespite several initiatives taken by government of India since 2013 to improve the performance of major ports, growth was not as anticipated. Hence, there is a need to understand the performance of these major ports during 2013–2020 and to identify the critical challenges that affect their performance. Design/methodology/approachPerformance analysis was conducted using Malmquist productivity index (MPI) and critical challenges were identified using interpretive structural modelling (ISM) technique as well as the cross-impact matrix multiplication (MICMAC). FindingsTen major ports in terms of operational, 12 ports in terms of service quality, and six ports in terms of financial performance have been categorised as high performers, based on the MPI values. 19 challenges affecting the performance were identified in an eight layered ISM model. Research limitationsThis research is limited to major ports of India and does not cover the non-major ports of India due to unavailability of data Practical implicationsThis study will enable the port decision-makers to identify the ports which are high performers in terms of operational, service quality, and financial performance, and thereby the best practices followed across can be replicated. Originality/valueThis study explored the multi dimensions of performance of Major ports of India and there was no such study in the past. Despite the existence of performance studies in the literature, none of them explored the challenges faced by the major ports.

Has Covid-19 Pandemic had an Impact on the Productivity of Indonesia Zakat Institutions?

This study aims to measure the productivity of zakat institutions in Indonesia using the Malmquist Productivity Index (MPI) method with the research period 2016-2022. The research objects used are 7 zakat institutions in Indonesia. The data of this study comes from the annual financial statements of each institution from the period 2016-2022. The input variables in this study are employee costs, operational costs and total assets. And for the output variable is the collection and distribution of zakat. The results of this study explain that during the period 2016-2022, the productivity level of zakat institutions in Indonesia has a fluctuating trend from year to year. Based on the average TFPCH score, it is concluded that the productivity of zakat institutions shows a decline and technological change has not contributed optimally to the increase in the productivity of zakat institutions in Indonesia. Furthermore, the productivity of Zakat Institutions during the Covid-19 pandemic has a significant influence on the productivity level of LAZ in Indonesia. Then, there are only two LAZs that have increased productivity, namely BAMUIS BNI and YBM PLN. We also apply quadrant analysis to divide zakat institutions based on efficiency and technological changes value.

Semiconductor industry supply chain productivity changes: Incorporating corporate green performances

AbstractGreen supply chain management (GSCM) has been applied by semiconductor firms to ameliorate environmental problems. This study aims to evaluate the green performance of semiconductor supply chains to examine the effect of GSCM. Using the meta‐frontier Malmquist productivity index as the research method, and a sample of global semiconductor firms consisting of three groups, design, manufacturing, and assembling, as research objects, this study evaluates variation in performance while considering environmental variables and disregarding environmental variables respectively, and compares the differences between those two conditions for the whole supply chain and each group in the supply chain. This study discovers no significant differences in both considering and disregarding environmental variables scenarios, productivity of the whole supply chain shows progress. This study found the investment in enhancing technology development as a more important factor in productivity improvement and identifies design as the global leading sub‐industry in the semiconductor supply chain.

Estimating the efficiency of primary health care services and its determinants: evidence from provincial panel data in China.

The efficiency of primary health care services is drawing increased attention worldwide, especially in developing countries. Health care reform in China has moved into the 'deep water zone' phase and is facing the dilemma of inefficiency in primary health care services, which is a critical challenge for universal health coverage. In this study, we estimate the efficiency of primary health care services in China and its determinants. A combination of a super-SBM (Slack-Based Measure) model, a Malmquist productivity index model and a Tobit model is used to study provincial panel data, and the results demonstrate the inefficiency of primary health care services in China and the variations in efficiency values between regions. Over time, the productivity of primary health care services shows a decreasing trend, mainly due to slowing technology change. Financial support is needed to improve the efficiency of primary health care services, but it is worth noting that existing social health insurance coverage decreases efficiency, while economic development, urbanization and education also have a significant impact. The findings suggest that increasing financial support should remain a priority in developing countries but that reasonable reimbursement design, appropriate payment methods and comprehensive supporting social health insurance policies are key to the next step of reform.

Assessment of national circular economy performance using super-efficiency dual data envelopment analysis and Malmquist productivity index: Case study of 27 European countries

The global commitment toward carbon neutrality and net zero emissions has substantially pressed the needs for all countries to accelerate the adoption of the circular economy paradigm. Tracking the national progress in terms of circular economy performance would provide valuable insights that could aid the effective design of improvement strategies toward sustainability. The current research proposes the combination of super-efficiency dual Data Envelopment Analysis and Malmquist productivity index to provide a full ranking and measure productivity changes in terms of circular economy of 27 European countries. The assessment involved six circular economy indicators encompassing waste generation per capita, waste intensity of the economy, recycling rate of waste in both overall and specific types of waste, i.e., packaging waste and biowaste, and circular material use rate. Our study indicates about one-half of the European countries were efficient in terms of circularity in 2018, where Netherlands, Germany, Austria, and Belgium were the front runner. The proposed approach suggests the European countries enhance their overall circular economy performance by prioritizing improvements strategies through promoting the recycling of biowaste and the circular material use rate. The MPI results over 2012–2018 indicate that Luxembourg exhibited the highest circularity advancement by 6%. Overall, the European countries have slightly enhanced their progression towards circular economy around 0.2% improvement. This suggests the European countries strengthen their policy and regulatory frameworks in support of the transition towards circular economy and encourage progressive movements in such a collaborative manner with the relevant stakeholders to build the momentum for change.

Research on the dynamic evolution and influence factors of industrial energy efficiency in China Yangtze River Economic Belt

Improving the Yangtze River Economic Belt's industrial energy efficiency is not only an important measure to alleviate China's energy shortages but also a drive to promote green economic development. The Super-EBM model, Malmquist productivity index, exploratory spatial data analysis, and Spatial Dubin model are used in this article to investigate the spatial-temporal dynamic development characteristics and influencing factors of industrial energy efficiency in 108 cities of the Yangtze River Economic Belt from 2011 to 2020. The findings demonstrate that the industrial energy efficiency of the Yangtze River Economic Belt and its three urban agglomerations went through three stages, including the “oscillation period,” “stability period,” and “enhancement period,” and decreases from east to west in the spatial dimension. The Yangtze River Delta urban agglomeration has the highest industrial energy efficiency, followed by the Middle-reach Yangtze River urban agglomeration, and the Chengdu-Chongqing urban agglomeration is the lowest. Further, this article identifies seven influencing factors including government intervention, industrial structure, degree of openness, R&D investment, urbanization, economic development, and environmental regulation. This article provides suggestions for industrial energy efficiency improvement.

Determinants of sharia life insurance productivity in Indonesia

This study examines the productivity and factors influencing the productivity of Sharia-compliant life insurance businesses in Indonesia over six years, from 2014 to 2019. A Two-Stage Malmquist Productivity Index was utilized. The first stage examined productivity using the Malmquist Productivity Index (MPI) method, while the second used the panel data regression method to identify the factors influencing productivity. This research can give insurance management an overview of its productivity levels and the factors affecting productivity. According to the results of the MPI, Islamic life insurance businesses in Indonesia have not yet achieved productivity. The insignificance of technological advancements causes it. The variables of solvency, interest rate, inflation, currency rate, and production index substantially impact Sharia-compliant life insurance companies' productivity. Businesses must be aware of the elements that influence their level of production.

Measuring farm productivity under production uncertainty

AbstractThis research introduces a novel empirical application to the assessment of farm productivity growth. While the existing research on productivity change has primarily focussed on ex post output observations, it has been shown that ignoring production uncertainty can lead to unreliable results. Using a state‐contingent framework to represent the stochastic production environment, we extend the recent line of research that merged the state‐contingent approach and efficiency measurement to productivity change using the Malmquist and Luenberger productivity indices. Using a balanced panel of 117 arable crop farms surveyed in 2011 and 2015, we show through the study results that productivity decreased, with technological regress being the major source of productivity change. Differences in productivity change between nonstochastic and stochastic modelling show the relevance to consider the state‐contingent framework when assessing farms' productivity.