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Measuring the efficiency and productivity of the Croatian banks with Malmquists index of change of total factor productivity

Author

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  • Marko Primorac

    (Faculty of Economics, Zagreb)

  • Zvonimir Troskot

    (Faculty of Economics, Zagreb)

Abstract

In the literature that deals with the empirical measurement of relative technical efficiency and change in the productiveness of banks over time the Malmquist index of change of total factor productivity has become the most often-used analytical tool. It has been shown that the Malmquist index helps both central and commercial bank analysis to monitor trends within the banking sector, and that it can be used as assistance in controlling the system and in strategic planning. This investigation is directed at the relative comparison of banks within the banking sector of Croatia in the period from 2000 to 2003, and is the first paper in which the Croatian banking sector has been analysed with the application of the Malmquist index of change in total factor productivity. The scientific contribution deriving from this is heightened by the interdisciplinarity that informs the paper. The primary objective of the investigation is the monitoring of relative trends of banks inside the very dynamic Croatian banking sector. Focus is placed on the need for the development of additional models to cover alternative and above all off-balance-sheet indicators.

Suggested Citation

  • Marko Primorac & Zvonimir Troskot, 2005. "Measuring the efficiency and productivity of the Croatian banks with Malmquists index of change of total factor productivity," Financial Theory and Practice, Institute of Public Finance, vol. 29(4), pages 309-325.
    • Handle: RePEc:ipf:finteo:v:29:y:2005:i:4:p:309-325
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    References listed on IDEAS

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    Cited by:

    1. Galab, S. & Vedam, Bhavanarayana, 2018. "Analysing Bank Productivity Using Malmquist Approach: A Case of Karnataka and Undivided Andhra Pradesh Regional Rural Banks (RRBs)," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 73(04), October.

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    More about this item

    Keywords

    Malmquist TFP index; banking performance;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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