IDEAS home Printed from https://ideas.repec.org/a/spr/empeco/v52y2017i4d10.1007_s00181-016-1104-6.html
   My bibliography  Save this article

A sequential global Malmquist productivity index: Productivity growth index for unbalanced panel data considering the progressive nature of technology

Author

Listed:
  • Yoonhwan Oh

    (Seoul National University)

  • Dong-hyun Oh

    (Inha University)

  • Jeong-Dong Lee

    (Seoul National University)

Abstract

This study proposes an alternative Malmquist productivity index for measuring productivity growth that can be applied to an unbalanced panel data set by considering the progressive nature of technology. The proposed methodology overcomes the weakness of the conventional Malmquist productivity index, which bears spurious technical change and cannot be applied to unbalanced panel data. To develop the methodology, we integrated the concepts of the sequential production possibility set of Tulkens and Vanden Eeckaut (Eur J Oper Res 80:474–499, 1995) and of the global frontier of Asmild and Tam (J Prod Anal 27:137–148, 2007). The suggested index is applied to analyze unbalanced panel data on electric utilities of Korea and the USA between 2001 and 2010. Using the empirical investigation, we show how the suggested index overcomes the fictitious technical regress phenomenon and can be employed for unbalanced panel data.

Suggested Citation

  • Yoonhwan Oh & Dong-hyun Oh & Jeong-Dong Lee, 2017. "A sequential global Malmquist productivity index: Productivity growth index for unbalanced panel data considering the progressive nature of technology," Empirical Economics, Springer, vol. 52(4), pages 1651-1674, June.
    • Handle: RePEc:spr:empeco:v:52:y:2017:i:4:d:10.1007_s00181-016-1104-6
    DOI: 10.1007/s00181-016-1104-6
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s00181-016-1104-6
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s00181-016-1104-6?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Kwoka, John & Pollitt, Michael, 2010. "Do mergers improve efficiency? Evidence from restructuring the US electric power sector," International Journal of Industrial Organization, Elsevier, vol. 28(6), pages 645-656, November.
    2. Supawat Rungsuriyawiboon & Spiro Stefanou, 2008. "The dynamics of efficiency and productivity growth in U.S. electric utilities," Journal of Productivity Analysis, Springer, vol. 30(3), pages 177-190, December.
    3. Dong-hyun Oh, 2011. "Productivity growth, efficiency change and technical progress of the Korean manufacturing industry," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 16(1), pages 50-70.
    4. Oh, Dong-hyun & Lee, Yong-Gil, 2016. "Productivity decomposition and economies of scale of Korean fossil-fuel power generation companies: 2001–2012," Energy, Elsevier, vol. 100(C), pages 1-9.
    5. Henry Tulkens & Philippe Eeckaut, 2006. "Nonparametric Efficiency, Progress and Regress Measures For Panel Data: Methodological Aspects," Springer Books, in: Parkash Chander & Jacques Drèze & C. Knox Lovell & Jack Mintz (ed.), Public goods, environmental externalities and fiscal competition, chapter 0, pages 395-429, Springer.
    6. Hongliang Yang & Michael Pollitt, 2012. "Incorporating undesirable outputs into Malmquist TFP indices with an unbalanced data panel of Chinese power plants," Applied Economics Letters, Taylor & Francis Journals, vol. 19(3), pages 277-283, February.
    7. Chen Lin & Sanford Berg, 2008. "Incorporating Service Quality into Yardstick Regulation: An Application to the Peru Water Sector," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 32(1), pages 53-75, February.
    8. Victoria Shestalova, 2003. "Sequential Malmquist Indices of Productivity Growth: An Application to OECD Industrial Activities," Journal of Productivity Analysis, Springer, vol. 19(2), pages 211-226, April.
    9. Nakano, Makiko & Managi, Shunsuke, 2008. "Regulatory reforms and productivity: An empirical analysis of the Japanese electricity industry," Energy Policy, Elsevier, vol. 36(1), pages 201-209, January.
    10. Oh, Dong-hyun, 2010. "A metafrontier approach for measuring an environmentally sensitive productivity growth index," Energy Economics, Elsevier, vol. 32(1), pages 146-157, January.
    11. Caves, Douglas W & Christensen, Laurits R & Diewert, W Erwin, 1982. "The Economic Theory of Index Numbers and the Measurement of Input, Output, and Productivity," Econometrica, Econometric Society, vol. 50(6), pages 1393-1414, November.
    12. Heshmati, Almas, 2002. "Productivity measurement in Swedish departments of gynecology and obstetrics," Structural Change and Economic Dynamics, Elsevier, vol. 13(3), pages 315-336, September.
    13. Los, Bart & Timmer, Marcel P., 2005. "The 'appropriate technology' explanation of productivity growth differentials: An empirical approach," Journal of Development Economics, Elsevier, vol. 77(2), pages 517-531, August.
    14. Mette Asmild & Fai Tam, 2007. "Estimating global frontier shifts and global Malmquist indices," Journal of Productivity Analysis, Springer, vol. 27(2), pages 137-148, April.
    15. Oh, Dong-hyun, 2015. "Productivity growth, technical change and economies of scale of Korean fossil-fuel generation companies, 2001–2012: A dual approach," Energy Economics, Elsevier, vol. 49(C), pages 113-121.
    16. Pastor, Jesus T. & Lovell, C.A. Knox, 2005. "A global Malmquist productivity index," Economics Letters, Elsevier, vol. 88(2), pages 266-271, August.
    17. Binswanger, Hans P, 1974. "A Microeconomic Approach to Induced Innovation," Economic Journal, Royal Economic Society, vol. 84(336), pages 940-958, December.
    18. Sufian, Fadzlan, 2011. "Banks total factor productivity change in a developing economy: Does ownership and origins matter?," Journal of Asian Economics, Elsevier, vol. 22(1), pages 84-98, February.
    19. Mathur, Somesh Kumar, 2007. "Indian IT industry: a performance analysis and a model for possible adoption," MPRA Paper 2368, University Library of Munich, Germany.
    20. Fare, Rolf & Grosskopf, Shawna & Yaisawarng, Suthathip & Li, Sung Ko & Wang, Zhaoping, 1990. "Productivity growth in Illinois electric utilities," Resources and Energy, Elsevier, vol. 12(4), pages 383-398, December.
    21. Oh, Dong-hyun & Heshmati, Almas, 2010. "A sequential Malmquist-Luenberger productivity index: Environmentally sensitive productivity growth considering the progressive nature of technology," Energy Economics, Elsevier, vol. 32(6), pages 1345-1355, November.
    22. Fare, Rolf & Grosskopf, Shawna & Noh, Dong-Woon & Weber, William, 2005. "Characteristics of a polluting technology: theory and practice," Journal of Econometrics, Elsevier, vol. 126(2), pages 469-492, June.
    23. Färe, Rolf & Grosskopf, Shawna & Pasurka, Carl A., 2007. "Environmental production functions and environmental directional distance functions," Energy, Elsevier, vol. 32(7), pages 1055-1066.
    24. Aghdam, Reza Fathollahzadeh, 2011. "Dynamics of productivity change in the Australian electricity industry: Assessing the impacts of electricity reform," Energy Policy, Elsevier, vol. 39(6), pages 3281-3295, June.
    25. Laurent CORTESE & Ping HUA, 2002. "The Effect of the Real Exchange Rate on Technological Progress. An Application to the Textile Industry in China," Working Papers 200207, CERDI.
    26. Finn R. FF8rsund, 2002. "On the circularity of the Malmquist productivity index," ICER Working Papers 29-2002, ICER - International Centre for Economic Research.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Thanh Ngo & David Tripe & Duc Khuong Nguyen, 2024. "Estimating the productivity of US agriculture: The Fisher total factor productivity index for time series data with unknown prices," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 68(3), pages 701-712, July.
    2. Andreas Eder & Bernhard Mahlberg & Bernhard Stürmer, 2021. "Measuring and explaining productivity growth of renewable energy producers: An empirical study of Austrian biogas plants," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 48(1), pages 37-63, February.
    3. Barnabé Walheer, 2022. "Global Malmquist and cost Malmquist indexes for group comparison," Journal of Productivity Analysis, Springer, vol. 58(1), pages 75-93, August.
    4. Bansal, Pooja & Kumar, Sunil & Mehra, Aparna & Gulati, Rachita, 2022. "Developing two dynamic Malmquist-Luenberger productivity indices: An illustrated application for assessing productivity performance of Indian banks," Omega, Elsevier, vol. 107(C).
    5. Sinwoo Lee & Dong-Woon Noh & Dong-hyun Oh, 2018. "Characterizing the Difference between Indirect and Direct CO 2 Emissions: Evidence from Korean Manufacturing Industries, 2004–2010," Sustainability, MDPI, vol. 10(8), pages 1-16, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Oh, Dong-hyun & Lee, Yong-Gil, 2016. "Productivity decomposition and economies of scale of Korean fossil-fuel power generation companies: 2001–2012," Energy, Elsevier, vol. 100(C), pages 1-9.
    2. Chung, Yeimin & Heshmati, Almas, 2013. "Measurement of Environmentally Sensitive Productivity Growth in Korean Industries," IZA Discussion Papers 7235, Institute of Labor Economics (IZA).
    3. Bansal, Pooja & Kumar, Sunil & Mehra, Aparna & Gulati, Rachita, 2022. "Developing two dynamic Malmquist-Luenberger productivity indices: An illustrated application for assessing productivity performance of Indian banks," Omega, Elsevier, vol. 107(C).
    4. Juan Du & Yongrui Duan & Jinghua Xu, 2019. "The infeasible problem of Malmquist–Luenberger index and its application on China’s environmental total factor productivity," Annals of Operations Research, Springer, vol. 278(1), pages 235-253, July.
    5. Juan Aparicio & Javier Barbero & Magdalena Kapelko & Jesus T. Pastor & Jose L. Zofio, 2016. "Environmental Productivity Change in World Air Emissions: A new Malmquist-Luenberger Index Approach," JRC Research Reports JRC104083, Joint Research Centre.
    6. Oh, Dong-hyun & Heshmati, Almas, 2010. "A sequential Malmquist-Luenberger productivity index: Environmentally sensitive productivity growth considering the progressive nature of technology," Energy Economics, Elsevier, vol. 32(6), pages 1345-1355, November.
    7. Oh, Donhyun & Heshmati, Almas, 2009. "A Sequential Malmquist-Luenberger Productivity Index," Working Paper Series in Economics and Institutions of Innovation 181, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    8. Sai, Rockson & Lin, Boqiang, 2022. "Productivity assessment of power generation in Kenya: What are the impacts?," Energy, Elsevier, vol. 254(PA).
    9. Ke Wang & Yujiao Xian & Yi-Ming Wei & Zhimin Huang, 2016. "Sources of carbon productivity change: A decomposition and disaggregation analysis based on global Luenberger productivity indicator and endogenous directional distance function," CEEP-BIT Working Papers 91, Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology.
    10. Dubrocard, Anne & Prombo, Michel, 2012. "International comparison of Environmental performance," MPRA Paper 48072, University Library of Munich, Germany, revised 05 Jul 2013.
    11. Li, Ke & Lin, Boqiang, 2015. "Measuring green productivity growth of Chinese industrial sectors during 1998–2011," China Economic Review, Elsevier, vol. 36(C), pages 279-295.
    12. Portela, Maria C.A.S. & Thanassoulis, Emmanuel, 2010. "Malmquist-type indices in the presence of negative data: An application to bank branches," Journal of Banking & Finance, Elsevier, vol. 34(7), pages 1472-1483, July.
    13. Stefan Seifert, 2015. "Measuring Productivity When Technologies Are Heterogeneous: A Semi-Parametric Approach for Electricity Generation," Discussion Papers of DIW Berlin 1526, DIW Berlin, German Institute for Economic Research.
    14. Dong-hyun Oh, 2010. "A global Malmquist-Luenberger productivity index," Journal of Productivity Analysis, Springer, vol. 34(3), pages 183-197, December.
    15. Dakpo, K Hervé & Desjeux, Yann & Jeanneaux, Philippe & Latruffe, Laure, 2016. "Productivity, efficiency and technological change in French agriculture during 2002-2014: A Färe-Primont index decomposition," 149th Seminar, October 27-28, 2016, Rennes, France 244793, European Association of Agricultural Economists.
    16. Ke Li & Malin Song, 2016. "Green Development Performance in China: A Metafrontier Non-Radial Approach," Sustainability, MDPI, vol. 8(3), pages 1-21, March.
    17. Arbona, Alexei & Giménez, Víctor & López-Estrada, Sebastián & Prior, Diego, 2022. "Efficiency and quality in Colombian education: An application of the metafrontier Malmquist-Luenberger productivity index," Socio-Economic Planning Sciences, Elsevier, vol. 79(C).
    18. Hampf, Benjamin, 2017. "Rational inefficiency, adjustment costs and sequential technologies," European Journal of Operational Research, Elsevier, vol. 263(3), pages 1095-1108.
    19. Víctor Giménez & Claudio Thieme & Diego Prior & Emili Tortosa-Ausina, 2014. "An international comparison of educational systems: an application of the global Malmquist-Luenberger index," Working Papers 2014/18, Economics Department, Universitat Jaume I, Castellón (Spain).
    20. Aparicio, Juan & Pastor, Jesus T. & Zofio, Jose L., 2013. "On the inconsistency of the Malmquist–Luenberger index," European Journal of Operational Research, Elsevier, vol. 229(3), pages 738-742.

    More about this item

    Keywords

    Malmquist productivity index; Technical progress; Efficiency change; Electric utility;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:empeco:v:52:y:2017:i:4:d:10.1007_s00181-016-1104-6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.