Bank efficiency and governance: Evidence from Indian banking

Riyanka Baral () and Debasis Patnaik
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Riyanka Baral: BITS Pilani K K Birla Goa Campus
Debasis Patnaik: BITS Pilani K K Birla Goa Campus

Journal of Management & Governance, 2023, vol. 27, issue 3, No 12, 957-985

Abstract: Abstract Banks play a vital role in the economy, so their productivity and performance should be analyzed through efficient methods. This study aims to investigate the banks’ productivity and their relationship with governance. Malmquist productivity index, a non-parametric method was used to measure the productivity of Indian banks. Further banks were classified into the large bank and small bank categories. Productivity analysis of Indian banks was studied in four different sub-periods of its development from 2000 to 2019 making robust outcomes. Historical data from the year 2000–2019 is used to reveal pre-recession and post-recession outcomes. The empirical results show that the average productivity of Indian banks has increased at a rate of 1.2% per annum. 2001 was the most efficient year whereas 2003 was the least efficient year. Multilinear regression was used to find the relationship between productivity and governance. The research outcomes show that the productivity of the large banks is significantly influenced by women on board while the audit committee meeting influences the productivity of small banks. The study provides the researchers, academicians, management of the banks, and regulatory body a new insight into how corporate governance influences the banks’ productivity so that they can formulate a better policy to generate more productivity.

Keywords: Productivity; Efficiency; Indian banks; Governance; Malmquist productivity index (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s10997-021-09610-9

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