IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/77969.html
   My bibliography  Save this paper

Productivity change of Ethiopian banks: A malmquist productivity index approach

Author

Listed:
  • Lema, Tadesse Zenebe

Abstract

This study evaluates the productivity change of the Ethiopian banking industry. For this purpose secondary data on input variables (interest expense, non-interest expense and deposit) and output variables (interest income, non-interest income and loan) are collected from the audited balance sheets and income statements of the banks under study. A Malmquist productivity index approach is employed to evaluate the productivity change of the Banks. The results of the study confirmed that; Abay bank, Construction and Business Bank and Commercial Bank of Ethiopia exhibited a productivity regress. For Abay Bank productivity regress is due to the technical change component while for Construction and Business bank and Commercial Bank of Ethiopia productivity regress is due to the efficiency change component. Thus, Abay bank should invest more on technological development and innovation while Construction and Business bank and Commercial Bank of Ethiopia should improve their resource use efficiency. The efficiency change component is split into pure technical efficiency component and scale efficiency component and the results revealed that Construction and Business bank and United bank exhibited productivity regress in the pure technical efficiency component while Construction and Business bank, Commercial bank of Ethiopia, Nib international bank and Wegagen bank exhibited productivity regress in the scale efficiency change component. Thus, Construction and Business bank and United bank should improve their managerial capacity and Construction and Business bank, Commercial Bank of Ethiopia, Nib international bank and Wegagen bank should adjust their scale of operation.

Suggested Citation

  • Lema, Tadesse Zenebe, 2016. "Productivity change of Ethiopian banks: A malmquist productivity index approach," MPRA Paper 77969, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:77969
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/77969/1/MPRA_paper_77969.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Dang-Thanh Ngo & Linh Thi Phuong Nguyen, 2012. "Total Factor Productivity of Thai Banks in 2007-2010. An Application of DEA and Malmquist Index," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 2(5), pages 1-2.
    2. Serpil Kilic Depren & Ozer Depren, 2016. "Measuring Efficiency and Total Factor Productivity using Data Envelopment Analysis: An Empirical Study from Banks of Turkey," International Journal of Economics and Financial Issues, Econjournals, vol. 6(2), pages 711-717.
    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. Alem Gebremedhin Berhe, 2021. "An Empirical Analysis of Productivity Changes in the Ethiopian Commercial Banks: Using DEA- Based Malmquist Productivity Index Approach," Accounting and Finance Research, Sciedu Press, vol. 10(1), pages 1-48, February.

    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. Chan, Sok-Gee & Aktan, Bora & Burton, Bruce & Koh, Eric H.Y., 2021. "The impact of soft information and institutional quality on foreign bank efficiency – Evidence from ASEAN-5 countries," International Review of Economics & Finance, Elsevier, vol. 74(C), pages 23-32.
    2. Ayhan Aydın, 2022. "Benchmarking healthcare systems of OECD countries: A DEA - based Malmquist Productivity Index Approach," Alphanumeric Journal, Bahadir Fatih Yildirim, vol. 10(1), pages 25-40, June.
    3. Huang, Junbing & Cai, Xiaochen & Huang, Shuo & Tian, Sen & Lei, Hongyan, 2019. "Technological factors and total factor productivity in China: Evidence based on a panel threshold model," China Economic Review, Elsevier, vol. 54(C), pages 271-285.

    More about this item

    Keywords

    Productivity Change; Commercial Banks; Malmquist Productivity Index; Technical Efficiency Change; Technological Change;
    All these keywords.

    JEL classification:

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

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:pra:mprapa:77969. 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: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    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.