Productivity and efficiency dynamics in Indian banking: An input distance function approach incorporating quality of inputs and outputs

Journal of Applied Econometrics

Volumn 27, Issue 2, 2012, Pages 205-234

  Das, Abhiman ^a   Kumbhakar, Subal C ^b,c  

^a RESERVE BANK OF INDIA   (India)

^b BINGHAMTON UNIVERSITY   (United States)

^c UNIVERSITY OF STAVANGER   (Norway)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 84857185965     PISSN: 08837252     EISSN: 10991255     Source Type: Journal    
DOI: 10.1002/jae.1183     Document Type: Article

References (39)

1. Alvarez A, Amsler C, Orea L, Schmidt P. 2006. Interpreting and testing the scaling property in models where inefficiency depends on firm characteristics. Journal of Productivity Analysis 25: 201-212.
2. Battese GE, Coelli TJ. 1995. A model for technical inefficiency effects in a stochastic frontier production function for panel data. Empirical Economics 20: 325-332.
3. Bauer PW, Berger AN, Ferrier GD, Humphrey DB. 1998. Consistency conditions for regulatory analysis of financial institutions: a comparison of frontier efficiency methods. Journal of Economics and Business 50: 85-114.
4. Benston GJ. 1965. Branch banking and economies of scale. Journal of Finance 20: 312-331.
5. Berger AN. 2007. International comparisons of banking efficiency. Financial Markets, Institutions, Instruments 16: 119-145.
6. Berger AN, Humphrey D. 1992. Measurement and efficiency issues in commercial banking. In Output Measurement in the Service Sectors, Griliches Z (ed.). University of Chicago Press: Chicago, IL; 245-300.
7. Berger AN, Humphrey DB. 1997. Efficiency of financial institutions: international survey and directions for future research. European Journal of Operations Research 98: 175-212.
8. Berger AN, Hanweck GA, Humphrey DB. 1987. Competitive viability in banking: scale, scope, and product mix economies. Journal of Monetary Economics 20: 501-520.
9. Bhattacharyya A, Lovell CAK, Sahay P. 1997. The impact of liberalization on the productive efficiency of Indian commercial banks. European Journal of Operations Research 98: 332-345.
10. Bonaccorsi di Patti E, Hardy DC. 2005. Financial sector liberalization, bank privatization, and efficiency: evidence from Pakistan. Journal of Banking and Finance 29: 2381-2406.
11. Das A, Ghosh S. 2006. Financial deregulation and efficiency: an empirical analysis of Indian banks during the post reform period. Review of Financial Economics 15: 193-221.
12. Das A, Nag AK, Ray SC. 2005. Liberalization, ownership and efficiency in Indian banking. Economic and Political Weekly 40: 1190-1197.
13. Fixler D, Zieschang KD. 1992. Incorporating ancillary measures of process and quality change into a superlative productivity index. Journal of Productivity Analysis 2: 245-267.
14. Hancock D. 1985. Bank profitability, interest rates and monetary policy. Journal of Money Credit and Banking 17: 189-202.
15. Jalan B. 2002. Indian banking and finance: managing new challenges. Speech delivered at the Bank Economists' Conference, Kolkata.
16. Jondrow J, Lovell CAK, Materov IS, Schmidt P. 1982. On the estimation of technical inefficiency in the stochastic production function model. Journal of Econometrics 19: 233-248.
17. Kao C, Liu S. 2004. Predicting bank performance with financial forecasts: a case of Taiwan commercial banks. Journal of Banking and Finance 28: 2353-2368.
18. Karagiannis G, Midmore P, Tzouvelekas V. 2004. Parametric decomposition of output growth using a stochastic input distance function. American Journal of Agricultural Economics 86: 1044-1057.
19. Kumbhakar SC. 2009. Estimation of production technology using primal approaches. Paper presented at the 4th Annual New York Camp Econometrics, Lake Placid, NY.
20. Kumbhakar SC, Hjalmarsson L. 1998. Relative performance of public and private ownership under yardstick competition: electricity retail distribution. European Economic Review 42: 97-122.
21. Kumbhakar SC, Lovell CAK. 2000. Stochastic Frontier Analysis. Cambridge University Press: Cambridge, UK.
22. Kumbhakar SC, Sarkar S. 2003. Deregulation, ownership and productivity growth in the banking industry: evidence from India. Journal of Money, Credit, and Banking 35: 403-414.
23. Kumbhakar SC, Sarkar S. 2005. Deregulation, ownership and efficiency change in Indian banking: an application of stochastic frontier analysis. In Theory and Application of Productivity and Efficiency, Econometric and DEA Approach, Ghosh R, Neogi C (eds). Macmillan: New Delhi; 125-156.
24. Kumbhakar SC, Wang D. 2007. Economic reforms, efficiency, and productivity in Chinese banking. Journal of Regulatory Economics 32: 105-129.
25. Kumbhakar SC, Ghosh S, McGuckin JT. 1991. A generalized production frontier approach for estimating determinants of inefficiency of U.S. dairy farms. Journal of Business and Economic Statistics 9: 279-286.
26. Kwan SA, Eisenbeis A. 1997. Bank risk, capitalization and operating efficiency. Journal of Financial Services Research 12: 117-131.
27. Mohan R. 2005. Financial sector reforms in India: policies and performance analysis. Economic and Political Weekly 40: 1106-1119.
28. Pastor JM, Serrano L. 2006. The effect of specialization on banks' efficiency: an international comparison. International Review of Applied Economics 20: 125-149.
29. Ram Mohan TT, Ray SC. 2004. Comparing performance of public and private sector banks: a revenue maximization efficiency approach. Economic and Political Weekly 39: 1271-1276.
30. Reserve Bank of India 1954. All India Rural Credit Survey, Committee of the Direction of All India Rural Credit Survey, Bombay, India.
31. Sealey CW, Lindley J. 1977. Inputs, outputs and a theory of production and cost at depository financial institutions. Journal of Finance 32: 1252-1266.
32. Sensarma R. 2005. Cost and profit efficiency of Indian banks during 1986-2003. Economic and Political Weekly 40: 1198-1209.
33. Shanmugam KR, Das A. 2004. Efficiency of Indian commercial banks during reform period. Applied Financial Economics 14: 681-686.
34. Shephard RW. 1953. Cost and Production Functions. Princeton University Press: Princeton, NJ.
35. Sherman HD, Zhu J. 2006. Benchmarking with quality-adjusted DEA (Q-DEA) to seek lower-cost high-quality service: evidence from a U.S. bank application. Annals of Operations Research 145: 301-319.
36. Triplett JE. 1983. Concepts of quality in input and output price measures: a resolution of the user-value resource-cost debate. In The U.S. National Income and Product Account: Selected Topics, Foss MF (ed.). University of Chicago Press: Chicago, IL; 269-312.
37. Wang HJ. 2002. Heteroskedasticity and non-monotonic efficiency effects of a stochastic frontier model. Journal of Productivity Analysis 18: 241-253.
38. Williams J, Nguyen N. 2005. Financial liberalization, crisis, and restructuring: a comparative study of bank performance and bank governance in South East Asia. Journal of Banking and Finance 29: 2119-2154.
39. Yildirim HS, Philippatos GC. 2007. Efficiency of banks: recent evidence from the transition economies of Europe, 1993-2000. European Journal of Finance 31: 123-143.