The measurement of productive performance with consideration for allocative efficiency

Yu Zhao, Hiroshi Morita and Yukihiro Maruyama

Omega, 2019, vol. 89, issue C, 21-39

Abstract: We propose a profit ratio (the ratio of revenue to expenses) change index, which can be applied to panel data to measure productivity growth and suitable for situations when producers desire to maximize revenue and minimize expenses simultaneously. To identify the drivers of changes in a profit ratio change index, we decompose the index into profit ratio efficiency change and change of profit ratio boundary. We also propose an alternative decomposition of the profit ratio change index, which is the product of the Malmquist input-oriented productivity index and an allocation Malmquist productivity index. We demonstrate the method on a Japanese banking data set.

Keywords: Data envelopment analysis; Malmquist productivity index; Graph hyperbolic measure; Profit ratio efficiency; Categorization of production activities (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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DOI: 10.1016/j.omega.2018.09.012

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