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Better with age? The relationship between longevity and efficiency dynamics of nonprofit microfinance institutions

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  • Ayi Gavriel Ayayi

    (Université du Québec à Trois Rivières)

  • Mahinda Wijesiri

    (Ton Duc Thang University
    Ton Duc Thang University)

Abstract

The objective of this study is to investigate the relationship between longevity and efficiency dynamics of nonprofit microfinance institutions (NMFIs) over the 2005–2014 period. We examined this using a dynamic data envelopment analysis framework that considers the effect of carry-over activities between two consecutive time periods. A robust regression analysis was then used in our second-stage analysis to identify the efficiency drivers. Results showed that new and younger NMFIs perform better than matured ones, so older NMFIs are vulnerable to competition from younger peers and thus, they are more likely to fail. Results also show that NMFIs were not severely affected by the 2008 financial crisis.

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  • Ayi Gavriel Ayayi & Mahinda Wijesiri, 2018. "Better with age? The relationship between longevity and efficiency dynamics of nonprofit microfinance institutions," Quality & Quantity: International Journal of Methodology, Springer, vol. 52(5), pages 2331-2343, September.
    • Handle: RePEc:spr:qualqt:v:52:y:2018:i:5:d:10.1007_s11135-017-0668-3
    DOI: 10.1007/s11135-017-0668-3
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    Cited by:

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    4. C. Adegboye*, Abidemi, 2023. "Financial Market Environment And Efficiency Of Microfinance Banks In Nigerial," Ilorin Journal of Economic Policy, Department of Economics, University of Ilorin, vol. 10(1), pages 1-14, June.

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    More about this item

    Keywords

    Nonprofit microfinance institutions; Longevity; Efficiency; Dynamic DEA; Tobit analysis;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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