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Efficiency and Productivity Growth in Indian Banking

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  • S. S. Rajan
  • V. Pandit

Abstract

This article attempts to examine technical efficiency and productivity performance of Indian scheduled commercial banks, for the period 1979–2008. We model a multiple output/multiple input technology production frontier using semi-parametric estimation methods. The endogeneity of multiple outputs is addressed by semi-parametric estimates in part by introducing multivariate kernel estimators for the joint distribution of the multiple outputs and correlated random effects. Output is measured as the rupee value of total loans and total investments at the end of the year. The estimates provide robust inferences about the productivity and efficiency gains due to economic reforms. JEL Classification : E23, G21, D24

Suggested Citation

  • S. S. Rajan & V. Pandit, 2012. "Efficiency and Productivity Growth in Indian Banking," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 6(4), pages 467-486, November.
    • Handle: RePEc:sae:mareco:v:6:y:2012:i:4:p:467-486
    DOI: 10.1177/0973801012462122
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    References listed on IDEAS

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    More about this item

    Keywords

    Banking; Frontier Efficiency; Productivity;
    All these keywords.

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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