Title: Malmquist productivity and efficiency analysis for banking industry in India

Authors: Seema Sharma, Sanjeev Gupta

Addresses: Room no. 503, Department of Management Studies, Vishwakarma Bhawan, Shaheed Jeet Singh Marg, Indian Institute of Technology, New Delhi, 110016, India. ' Department of Humanities and Management, Dr. B.R. Ambedkar National Institute of Technology, Jalandhar, 14011, Punjab, India

Abstract: This paper attempts to analyse the productivity and efficiency growth pattern of Indian banking industry during the post-liberalisation era. Malmquist data envelopment analysis (DEA) has been used to estimate the different performance measures viz., productivity growth, technological change, technical efficiency and scale efficiency for the period 1996-2006. Results indicate that during the study period, this industry experienced regress in technological progress along with stagnation in technical efficiency. Some progress is reported in scale economies but the dominating technological regress resulted in productivity decline. From the group wise analysis, nationalised sector came out to be the leader in case of scale economies whereas private sector emerged as the best performer in technical efficiency. None of the groups could experience positive productivity growth over the study period.

Keywords: Malmquist DEA; data envelopment analysis; technical efficiency; scale efficiency; total factor productivity; TFP; banking industry; India; technological change; economies of scale; privatisation; Indian banks.

DOI: 10.1504/IJBEX.2010.029488

International Journal of Business Excellence, 2010 Vol.3 No.1, pp.65 - 76

Published online: 30 Nov 2009 *

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