Skip to main content
SpringerLink
Log in

Malmquist Indexes Using a Geometric Distance Function (GDF). Application to a Sample of Portuguese Bank Branches

  • Published:
Journal of Productivity Analysis Aims and scope Submit manuscript

Abstract

Traditional approaches to calculate total factor productivity (TFP) change through Malmquist indexes rely on distance functions. In this paper we show that the use of distance functions as a means to calculate TFP change may introduce some bias in the analysis, and therefore we propose a procedure that calculates TFP change through observed values only. Our total TFP change is then decomposed into efficiency change, technological change, and a residual effect. This decomposition makes use of a non-oriented measure in order to avoid problems associated with the traditional use of radial oriented measures, especially when variable returns to scale technologies are to be compared. The proposed approach is applied in this paper to a sample of Portuguese bank branches.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • AD Athanassopoulos (1997) ArticleTitleService quality and operating efficiency synergies for management control in the provision of financial services: evidence from Greek bank branches Eur J Operat Res 98 300–313 Occurrence Handle10.1016/S0377-2217(96)00349-9

    Article  Google Scholar 

  • BM Balk (2001) ArticleTitleScale efficiency and productivity change J Prod Anal 15 IssueID3 159–183 Occurrence Handle10.1023/A:1011117324278

    Article  Google Scholar 

  • SA Berg FR Førsund ES Jansen (1992) ArticleTitleMalmquist indices of productivity growth during the deregulation of Norwegian banking, 1980–89 Scand J Econ 94 S211–S228 Occurrence Handle10.2307/3440261

    Article  Google Scholar 

  • AN Berger JH Leusner JJ Mingoi (1997) ArticleTitleThe efficiency of bank branches J Monet Econ 40 IssueID1 141–162 Occurrence Handle10.1016/S0304-3932(97)00035-4

    Article  Google Scholar 

  • H Bjurek (1996) ArticleTitleThe Malmquist total factor productivity index Scand J Econ 98 IssueID2 303–314 Occurrence Handle10.2307/3440861

    Article  Google Scholar 

  • D Caves LR Chistensen W Diewert (1982) ArticleTitleThe economic theory of index numbers and the measurement of input, output, and productivity Econometrica 50 IssueID6 1393–1414 Occurrence Handle10.2307/1913388

    Article  Google Scholar 

  • RG Chambers R Färe S Grosskopf (1996) ArticleTitleProductivity growth in APEC countries Pacific Econ Rev 1 IssueID3 181–190 Occurrence Handle10.1111/j.1468-0106.1996.tb00184.x

    Article  Google Scholar 

  • A Charnes WW Cooper E Rhodes (1978) ArticleTitleMeasuring efficiency of decision making units Eur J Operat Res 2 429–444 Occurrence Handle10.1016/0377-2217(78)90138-8

    Article  Google Scholar 

  • Y Chung R Färe S Grosskopf (1997) ArticleTitleProductivity and undesirable outputs: a 30 directional distance function approach J Environ Manage 51 IssueID3 229–240 Occurrence Handle10.1006/jema.1997.0146

    Article  Google Scholar 

  • ER Diewert AO Nakamura (2003) ArticleTitleIndex number concepts, measures and decompositions of productivity growth J Product Anal 19 IssueID2/3 127–159 Occurrence Handle10.1023/A:1022897231521

    Article  Google Scholar 

  • MJ Farrell (1957) ArticleTitleThe measurement of productive efficiency J Roy Stat Soc Series A, general 120 IssueIDpart 3 253–281 Occurrence Handle10.2307/2343100

    Article  Google Scholar 

  • R Färe E Grifell-Tatje S Grosskopf CAK Lovell (1997) ArticleTitleBiased technical change and malmquist productivity index Scand J Econ 99 IssueID1 119–128 Occurrence Handle10.1111/1467-9442.00051

    Article  Google Scholar 

  • R Färe S Grosskopf W-F Lee (2001) ArticleTitleProductivity and technical change: the case of Taiwan Appl Econ 33 IssueID15 1911–1925 Occurrence Handle10.1080/00036840010018711

    Article  Google Scholar 

  • R Färe S Grosskopf M Norris (1997) ArticleTitleProductivity growth, technical progress and efficiency changes in industrialized countries: reply’ Am Econ Rev 87 IssueID5 1040–1043

    Google Scholar 

  • R Färe S Grosskopf M Norris Z. Zhang (1994) ArticleTitleProductivity growth, technical progress and efficiency changes in industrialised countries Am Econ Rev 84 66–83

    Google Scholar 

  • Färe R, Grosskopf S, Roos P (1998) Malmquist productivity indexes: a survey of theory and practice. In: Färe R, Grosskopf S, Russell RR (eds) Index numbers: essays in honour of Sten Malmquist. Kluwer Academic Publishers, pp. 127–190.

  • FR Førsund (1998) ArticleTitleThe rise and fall of slacks: comments on quasi-Malmquist productivity indices J Prod Anal 10 21–34 Occurrence Handle10.1023/A:1018342214700

    Article  Google Scholar 

  • E Grifell-Tatjé CAK Lovell JT Pastor (1998) ArticleTitleA quasi-Malmquist productivity index J Prod Anal 10 7–20 Occurrence Handle10.1023/A:1018329930629

    Article  Google Scholar 

  • Lovell CAK (2001) The decomposition of Malmquist productivity indexes. Paper presented at the 7th European Workshop on Efficiency and Productivity Analysis, Oviedo, Spain, 25–29 September.

  • M Oral R Yolalan (1990) ArticleTitleAn Empirical Study on measuring operating efficiency and profitability of bank branches Eur J Oper Res 46 IssueID3 282–294 Occurrence Handle10.1016/0377-2217(90)90002-S

    Article  Google Scholar 

  • Portela MCS, Thanassoulis E (2002), Profit efficiency in DEA. Aston Business School Research Paper RP0206, ISBN 185449502X, University of Aston, Aston Triangle, Birmingham B4 7ET, UK.

  • MCS Portela E Thanassoulis (2005) ArticleTitleProfitability of a sample of Portuguese bank branches and its decomposition into technical and allocative components Eur J Oper Res 162 IssueID3 850–866 Occurrence Handle10.1016/j.ejor.2003.10.018

    Article  Google Scholar 

  • B Py (1990) Statistique Descriptive, 3e Édition Economica Paris

    Google Scholar 

  • Ray SC (2001) On an extended decomposition of the Malmquist productivity index. Paper presented at the 7th European Workshop on Efficiency and Productivity Analysis, Oviedo, Spain, September 25–29.

  • SC Ray E Desli (1997) ArticleTitleProductivity growth, technical progress and efficiency changes in industrialized countries: comment Am Econ Rev 87 IssueID5 1033–1039

    Google Scholar 

  • RM Thrall (2000) ArticleTitleMeasures in DEA with an application to the Malmquist index J Prod Anal 13 IssueID2 125–137 Occurrence Handle10.1023/A:1007800830737

    Article  Google Scholar 

  • JL Zofio CAK Lovell (2001) ArticleTitleGraph efficiency and productivity measures: an application to U.S agriculture Appl Econ 33 IssueID11 1433–1442 Occurrence Handle10.1080/00036840010009865

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Universidade Católica Portuguesa, Centro Regional do Porto, R. Diogo Botelho, 1327, 4169-005, Porto, Portugal

    Maria Conceição A. Silva Portela

  2. Aston Business School, Aston Triangle, B4 7ET, Birmingham, U.K

    Emmanuel Thanassoulis

Authors
  1. Maria Conceição A. Silva Portela
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Emmanuel Thanassoulis
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Maria Conceição A. Silva Portela.

Additional information

Maria Conceição A. Silva Portela - The authors acknowledge the financial support of the Portuguese Foundation for Science and Technology, and the European Social Fund. The contents of the paper are the responsibility of the authors.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Portela, M.C.A.S., Thanassoulis, E. Malmquist Indexes Using a Geometric Distance Function (GDF). Application to a Sample of Portuguese Bank Branches. J Prod Anal 25, 25–41 (2006). https://doi.org/10.1007/s11123-006-7124-z

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11123-006-7124-z

Keywords

Search

Navigation