Malmquist Total Factor Productivity Research Articles

Performance analysis in the coal bagging plant of Garp Lignite Corporation

AbstractCompanies can contribute to a country’s economy by means of efficient production in each of their units. The aim of this study was to examine the change in operational performance of the coal bagging plant of Garp Lignite Corporation in Turkey using the Malmquist total factor productivity index. The results showed that there was a decrease in the productivity of the bagging plant. This decrease could be due to the rapid growth of the market share of natural gas in heating and energy in recent years, the reduced demand for lignite, overuse use of energy as a result of the necessity to keep the plant active even when no bagging is performed, the current labor-intensive bagging process, and the difficulty in working continuously with qualified staff hired depending on the demand for coal. In conclusion, it is recommended that a fully automated coal bagging plant be built in the corporation.

Evaluation on China's forestry resources efficiency based on big data

The development of China's forestry resources has never been more challenging due to serious problems such as shortage, inferiority and uneven distribution of forestry resources. Therefore, the study and evaluation of China's forestry resources has a great significance to improve efficiency and ensure the sustainable development of the forestry resource. Meanwhile, the vast territory, huge population and widespread forest landscape of China have led to the numerous indexes and the huge data. To perform the research and evaluation accurately, this paper utilized the big data theory to analyze the relevant data of China's forestry resources. This study collected the data from 31 inland provinces and municipalities of China from 2005 to 2013, after which we carefully examined economic, social and ecological factors to choose assessment indexes and processed data accordingly. Firstly, we performed a cross-sectional dataset analysis using the method of data envelopment analysis to investigate the forestry resources efficiency in 31 inland provinces and municipalities of China in years 2008, 2012 and 2013. Secondly, we analyzed time series data of the 31 inland provinces and municipalities from 2005 to 2013 using the Malmquist total factor productivity index method. Our results showed the dominant factor that restraining forestry resources efficiency for the 31 inland provinces and municipalities is the implemented technology. So we suggest increasing the investment in science and technology to improve the overall efficiency of forestry resources, along with improvement of operation and management by relevant administrative departments to improve technology utilization. The innovation of this paper lies in the dynamic process of analysis.

Productivity and efficiency measurement of the Danish centralized biogas power sector

The widespread use of the renewable energy sources in the future's energy production is necessary, in order to avoid the predicted environmental, economic and social effects which can be derived from the overuse of fossil fuels. Denmark has announced to be fossil fuel independent with a renewable energy based heat and power source by 2050. Theoretically, the centralized biogas combined heat and power plants can play a determinant role in the subsequent Danish energy supply scheme, due to its feature to satisfy base load demand. The productivity and efficiency analysis of the currently operating Danish centralizes biogas CHP power plants is crucial in order to study whether there is a most efficient power plant which can be introduced as a “best practice” innovative technology for the future's Danish biogas power plants. In this paper we use the intertemporal Malmquist total factor productivity DEA method to analyze the change in the efficiency and productivity of the Danish centralized biogas power plants in the period 1992–2005.

Global Crisis and its Effect on Turkish Banking Sector: A Study with Data Envelopment Analysis

Abstract The purpose of study is to examine the effects of Global Crisis on public, private and foreign–capitalized total 19 commercial banks in the Turkish Banking Sector's performance criteria during the course of 2004–2012. With this purpose, to investigate the productivity and activity measurements Data Envelopment Analysis (DEA)–Variable Returns to Scale Model and DEA–Malmquist Total Factor Productivity Index appropriate to time series panel estimation structure were applied to by using ratio belongs to sector. According to findings obtained to DEA–Variable Returns to Scale Model, the effectiveness of banking sector shows an increasing trend within the period 2006–2009 after a one year decrease (2005), and moves a decreased structure in period 2010–2012. When sector is classified according to capital structure, it is seen public–capitalized bank groups were affected crisis. It is among the findings obtained that foreign-capitalized banks have worked significantly more efficient way, effectiveness degree of private-capitalized banks have been the course of decrease especially during the years 2010–2012. Findings obtained to DEA–Malmquist Total Factor Productivity generally followed the same trend throughout the years. The average TFP components are found the highest in influence the capture of innovation in sector. Relatively small proportion of unproductiveness decrease is discovered decision-making unit converges to the best production limit and showed activities at appropriate scales; while productivity increase performance positive change and managerial effectiveness. When Data Envelopment Analysis Model and the DEA–Malmquist Total Factor Productivity findings are considered together, Crisis doesn’t indicate an important inefficiency source on Turkish Banking Sector.

MEASURING THE EFFECTS OF MERGERS AND ACQUISITIONS ON THE ECONOMIC PERFORMANCE OF REAL ESTATE DEVELOPERS

Real estate developers in China are using mergers and acquisitions (M&As) to ensure their survival and competitiveness. However, no suitable method is yet available to assess whether such M&As provide enhanced value for those involved. Using a hybrid method of data envelopment analysis (DEA) and Malmquist total factor productivity (TFP) indices, this paper evaluates the short and medium term effects of M&As on acquirers’ economic performance with a set of 32 M&A cases occurring during 2000–2011 in China. The results of the analysis show that M&As generally have a positive effect on acquirers’ economic performance. Acquisitions on average experienced a steady growth in developer Malmquist TFP, a more progressive adoption of technology immediately after acquisition, a slight short-term decrease in technical efficiency after acquisition but followed by a marked increase in the longer term once the integration and synergy benefits were realised. However, there is no evidence to show whether developers achieved any short or long term scale efficiency improvements after M&A. The findings of this study provide useful insights on developer M&A performance from an efficiency and productivity perspective.

Economic consequences of investing in sensor systems on dairy farms

The objective of this study was to investigate the impact of investment in sensor systems on productivity change, using farm accounting data.Farm accounting data for the years 2008–2013 was available for 217 Dutch dairy farms. In addition, information was available on the adoption of sensor systems on these farms. For each farm, 5 input variables (number of dairy cows, number of hectares, total capital costs, total variable costs, and total labor costs) and 1 output variable (total revenues) were defined for each year. The Malmquist Total Factor Productivity index was used to examine productivity change for three categories of farms: farms without sensor systems, farms with sensor systems at an automatic milking system, and farms with sensor systems at a conventional milking system. The Malmquist index measures how the productivity of an individual farm changes over time and enables the contributions of technical change and technical efficiency change to be identified.Productivity did not change after investment in sensor systems on dairy farms. Furthermore, no technical change was found after investment in sensor systems, suggesting that the potential technological improvement claimed by producers of sensor systems does not materialize on dairy farms. Providing more information and guidance on how to use the output of sensor systems might improve the technical performance of the farms.

Seaport Efficiency in China; From the Perspective of Malmquist Total Factor Productivity

Seaport Efficiency in China; From the Perspective of Malmquist Total Factor Productivity

Financial efficiency analysis in Islamic banks:

This study uses Data Envelopment Analysis for the efficiency measurements while using the Malmquist Total Factor Productivity Index in order to measure the total factor productivity change. This study involves 4 Islamic banks operating in Turkey and 13 Islamic banks operating in Malaysia. Half of these Islamic banks operating in Turkey and Malaysia meet the technical productivity (CCR) value. In other words, half of these Islamic banks are able to use their Total Assets and Total Equities efficiently. It was found that the Technical Efficiency Change (EFFCH) value of the Islamic banks was never recorded above 1 for any time period. It was found that the Islamic Banks are unlikely to reach the production limit.

Productivity Change in the Turkish Banking Industry

The objective of this study is to make a detailed analysis of the total factor productivity of the banks operating in the Turkish banking industry from 2003 to 2014. We used the panel data of 42 banks and applied the Malmquist Total Factor Productivity Index method separately for each year. We then calculated the pure efficiency change, scale efficiency change, technical efficiency change, technological change and total factor productivity change indices. We found that between 2003 and 2014, there was a 5.2% increase in the total factor productivity of banks on average, and this increase was the result of a 2.5% increase in technical efficiency change index and a 2.7% increase in the technological change index. DOI: 10.5901/mjss.2015.v6n5p148

Measuring the Efficiency of Private Sector Banks: Evidence from India

This study examines the profitability of Indian private sector banks using a non-parametric test namely Data Envelopment Analysis (DEA). The study uses Malmquist total factor productivity to examine the shift (inward or outward) of banks’ efficiency frontier during the study period 2011-2013. Only secondary data has been used from the Bankscope database for this study. In this study, emphasis has been given on consolidating the efficiency of Indian private sector banks which is much more expected to the management point of view than the profitability. This study uses three input variables and three output variables to measure bank efficiency. The specific findings of this research shows that the private sector of Indian banks did not achieve progress in all respect during the study period, the banks with higher loan loss reserve and large liquidity reserve have been found as the most regressed banks, and the banks with higher progress have diversified the profit successfully from both interest and not-interest income. The limitations and policy implications of this study have been presented. The scope of future studies has also been addressed.

The efficiency of the European banking groups and its determinants

Purpose – The purpose of this paper is twofold. First, it aims to measure and compare the efficiency change of French, German, Italian, Spanish and UK banking groups in a context of financial crisis, over the period 2006-2010; second, it attempts to analyse the internal and environmental determinants of banking groups efficiency. Design/methodology/approach – In this paper the efficiency is estimated by a two-stage semi-parametric procedure. In the first stage, we build a common production frontier across countries using the data envelopment analysis (DEA) (Debreu, 1951; Farrell, 1957). To further analyse the efficiency changes over years we use the Malmquist total factor productivity index, based on DEA technique. In the second stage, in order to determine the factors that impact on bank efficiency, the authors perform a bootstrapped truncated regression model with discretionary inputs as independent variables, following Simar and Wilson (2007). Findings – The empirical results show that overall the “large” banking groups are more efficient than the “small” ones. However the Malmquist total factor productivity analysis highlights that during the crisis, in particular between 2007 and 2009, unless Britain, in all countries the small banks show a better cost performance than the larger ones. In general, the authors find a moderate efficiency convergence between countries and between large and small banking groups. As regards the determinants of banking groups efficiency, we find that more liquid, less capitalized banking groups and those more oriented towards the traditional activity of lending are more efficient. Practical implications – The authors find a positive and high statistically significant relationship between both long- and short-term liquidity degree and the cost efficiency of the banking groups. The policy implication of this result is very significative also in the light of the new banking regulation introduced by Basel III that imposes new rules to strengthen the liquidity risk management. Social implications – The authors find that the macroeconomic environment variables have some impact on efficiency: the higher the debt and the GDP per capita of the country the lower the bank’s efficiency. Originality/value – Unlike the most literature on this topic, that usually considers individual banks even if they belong to the same financial conglomerate, the authors analyse only banking groups. In particular, the authors consider all banking groups belonging to the most industrialized European countries in a context of financial crisis and cross-border aggregation movements. Furhermore the authors compare cross-country cost performance of small and large groups, considering the loan loss provisions as an additional input in order to correct the efficiency score for credit risk.

English

In this study, total factor productivity (TFP) with variance in its components as well as the technical efficiency levels of 25 active sugar factories in Turkey are surveyed via Data Envelopment Analysis (DEA) and Malmquist Total Factor Productivity method using the panel data from Turkish Sugar Factories Corporation’s annual activity reports. The aim of the study is to determine the comparative production performances of active sugar factories in Turkey, which would guide both government policies about the sector and the factory managements in the decision making process about issues such as production, growth and profit/cost analysis. It is found that sugar factories in Turkey show increase in TFP stemming from technological improvement in general. Although there is an increase in TFP and technical efficiency, it is nowhere near the one in technological efficiency. Considering the fact that variance in technical efficiency is set by scale efficiency and pure efficiency, the ability of production in optimal scales is found to be low imposing a more congruent use of already possessed production factors. These results put forward the need for increase in competitive capacity and resource management for the sugar factories in Turkey. Key words: Sugar factories, efficiency, productivity, data envelopmant analysis, Malmquist index.

Measuring Financial and Social Outreach Productivity of Microfinance Institutions in Bangladesh

The productive employment of scarce resources to achieve financial sustainability and social outreach among microfinance institutions (MFIs) has become a key concern of policymakers and practitioners. In view of its importance, this study adopted the Malmquist total factor productivity approach with a balanced panel dataset of 162 MFIs ranging from 2007 to 2012 to measure productivity performance. The results indicate that the microfinance sector in Bangladesh exhibited 4.3 % in overall productivity progress, attributed mainly to better managerial efficiency. Further splitting the output into financial and social outreach, known as ‘dual mission’, this study observed 3.9 and 5 % productivity progress per annum respectively, with five best practising MFIs being identified due to their balanced growth in both objectives. Although, depth of social outreach productivity (proxy by average loan size) recorded successive progress during the study period (2007–2012), breadth of social outreach productivity (proxy by number of savers) improved little due to the lack of innovative savings products. Thus, basing their designing of comprehensive savings products and development of appropriate synergies on the best five performing MFIs, the government and respective authorities should stimulate the transfer of their innovative practices to other MFIs to enhance sectorial growth and better serve the poor community.

Efficiency, productivity and Islamic banks: an application of DEA and Malmquist index

Purpose – This paper aims to compute the Malmquist Index of Islamic and conventional banks to compare their performance in the sample period of 2005-2009. Islamic banks have been showing tremendous growth throughout the world in recent past. Their progress is exceptional in Islamic countries on account of patronization for religious reasons. There existed vacuum in research of their productivity change over the years. Design/methodology/approach – This study tries to apply the Malmquist Index. The Malmquist Total Factor Productivity Index has been further divided into Efficiency Change Index, Technological Change Index, Pure Efficiency Change Index and Scale Efficiency Change Index to obtain an insight about the reasons for the change in productivity. Findings – Results indicate that the productivity of Islamic banks decreased in 2007 but it increased in 2008 to 2009. Islamic banks had higher productivity growth from 2005 to 2006, but they experienced lower growth in subsequent years as compared to their conventional counterparts. Research limitations/implications – Data were not available before 2005 in Pakistan. Practical implications – This study is helpful for the investors and bankers for formulating the future policy. Social implications – This study also provides a guideline for establishing the ethical financial institutions. Originality/value – This is an original attempt.

Efficiency Change in Pakistan Commercial Banking Sector: A Pre and Post Digital-Restructuring Analysis

In this study we examine the technical efficiency of commercial banking sector of Pakistan. In recent past Pakistan’s commercial banking is making substantial investment and up-gradation in information and communication technology (ICT) in order to keep pace with global banking industry. Due to financial linearization the entry of the foreign banks with advance technology in the commercial banking sector has been increased that inclines other banks to adopt the new technology in order to earn more of market share. To justify the huge investments in computers and related technologies many question arises about the efficiency & productivity growth of the banks due to ICT. Accordingly, this study analyzes the efficiency of a sample of 11 commercial banks for the period 1998 to 2012. Using data envelopment analysis (DEA) we measure the Malmquist productivity index (MPI) to measure total factor productivity (TFP). In this study the time period (1998-2012) has been decomposed into pre-digital reforms (19982005) & post-digital reforms (2006-2012) period, in order to compare the efficiency change after the adaptation of IT by commercial banking sector. The variables are selected under intermediation approach. The results show that technical efficiency has been significantly increased in post-digital reform era and as a result TFP has also been boosted. The results show that MCB has consistently scored the highest efficiency & Malmquist TFP scores.

TOTAL FACTOR PRODUCTIVITY OF MAJOR CROPS IN CENTRAL INDIA

The study estimated total factor productivity for principal crops in Madhya Pradesh using time series secondary data on area, production productivity of major crops in Madhya Pradesh. The Malmquist model is selected over Tornqvist model for the study because of stationality and redundancy problem associated with time series. Structural changes occurred in area and production of principal crops during the specific period of time due to policy effect and autonomous production as well. The variability in the total outputs and total inputs index was due to exploitation of available production potential in the state. Malmquist total factor productivity index explained the stages of production in Madhya Pradesh over periods of time. Post global and combine periods were better as compared with pre global period. Total factor productivity is a comprehensive measure of productivity and has gained acceptance among government officers, policy makers, productivity specialist and economist.

Productivity Change and Technical Efficiency in Indian Microfinance Institutions

Majority of Indian rural poor lack access to finance and depend on informal sources of finance (e.g., moneylenders). Microfinance Institutions (MFIs), which provide small financial services (loans, savings and insurance) to the poor without any collateral, have emerged as a major source of finance. Greater access and expansion of microfinance services require MFIs in India to enhance their productivity and organizational effectiveness over time. This article examines the changing trends and sources of productivity growth in Indian MFIs, by computing the Malmquist Total Factor Productivity (TFP) index for a panel of 34 Indian MFIs during 2005–2006 to 2010–2011, using Data Envelopment Analysis (DEA). The TFP index is decomposed to identify two important sources of productivity change, namely, changes in technical efficiency and technology of the sample MFIs. Technical efficiency change is further decomposed to measure pure technical efficiency change and scale efficiency change in the sample MFIs. The decomposition of TFP index indicates that the productivity of sample MFIs has declined over time, which shows that the Indian MFIs need to achieve significant innovations in technology to enhance their productivity. However, technical efficiency of MFIs has increased on average, which indicates that the managerial and operational effectiveness of MFIs has improved over time.

경제인문사회분야 정부출연연구기관의 생산성 변화 분석

The aim of this study was to analyze the productivity changes in government-funded research institutes for Economics & Humanities and Social Sciences. From Malmquist total factor productivity index analysis, the average productivity decreased 6.5% between 2006 and 2010. Further analysis showed that technical efficiency increased 4.7% annually while the technology change rate decreased 10.8% on average. Under pressure for innovation from the outside, research institutes responded to managerial efficiency improvement, which lead to increases in technical efficiency. On the other hand, for productivity improvement of government funded research institutes, they must pursue technological advances by securing an outstanding research workforce, expanding the R&D budget, and changing the R&D method. Each institute must perceive the cause of an individual institute's productivity change, and establish strategies for increasing productivity.

Impact of Bank Operational Efficiency Using a Three-Stage DEA Model

In this study the authors use a three-stage sequential technique to develop a Data Envelopment Analysis (DEA) model for examining a bank's technical efficiency index. Internal risk and environmental risk are incorporated into this model to accommodate the well-known BASEL III Accord (required capital adequacy ratio in the financial industry) and to ensure the amount of derivatives turnover ratio is at the level defined by industry best-practices. Information is obtained from 34 Taiwanese commercial banks for the period from 2008 to 2011 following the global financial crisis. The Malmquist total factor productivity index (TFP) is also employed to measure the impact of changes in productivity on the panel data. Empirical results derived from the DEA approach show a gain in technical efficiency and scale efficiency in the industry after adjusting the slack variables when using the corrected ordinary least squares (COLS) regression model. The results indicate that commercial banks need to diversify to increase their market share when dealing with derivatives which are associated with higher risk. The Balk's Malmquisit TFP index shows a decrease in bank productivity and improvement in pure technical efficiency. In this study the authors found that after risk-adjustment there was a distinct inefficient unit decrease and but a marginal unit increase in efficiency.

Efficiency and Technological Change of Commercial Banks: Evidence During 2000-2010

This paper analyzes banks technical efficiency and technological changes using decomposed Malmquist Index of six domestic commercial banks over the period of 2000 to 2010. The data analysis uses the DEA to generate efficiency scores and decomposes Malmquist total factor productivity growth to determine technological changes. A number of these banks are already in their enlarged merged form while others are merging during the period. The results suggest that on average the domestic commercial banks are technical inefficient which is mainly due to the scale effect. The study finds that on average the banks have not fully exhausted economies of scale. The mean total factor productivity declines during the period from 2000 to 2010 even though the banks adopt new technology. This scenario can be attributed to the deterioration of technical efficiency during the period which negates the diffusion of new technology in banking over the study period.