Identifying productivity change in Botswana’s financial institutions: an application of Malmquist productivity indices

Boitnmelo Moffat, Abbas Valadkhani and Charles Harvie ()
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Boitnmelo Moffat: University of Wollongong, http://www.uow.edu.au/index.html
Charles Harvie: University of Wollongong, http://business.uow.edu.au/econ/who/UOW010519.html

Economics Working Papers from School of Economics, University of Wollongong, NSW, Australia

Abstract: The productivity and efficiency of the financial sector is pivotal to the attainment of economic growth and development in developed and developing economies alike, and is of particular interest in the wake of financial sector reform and restructuring. This study applies the Malmquist productivity index to measure and decompose the total factor productivity change of ten financial institutions in Botswana in its post reform era, covering the period 2001-2006, into a ‘catching up’ or efficiency change, and a ‘frontier shift’ or technological change. The robustness and sensitivity of the empirical results presented is assessed by comparing outcomes from different input and output combinations derived from using the value added, intermediation and operating approaches. The empirical results indicate a loss or little productivity gain in Botswana’s financial institutions, arising mainly from technological regress. Policy implications from this are highlighted in the paper.

Keywords: Botswana; Malmquist indices; Productivity; Financial Institutions (search for similar items in EconPapers)
JEL-codes: C14 C6 C61 G2 G21 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2008
New Economics Papers: this item is included in nep-afr and nep-eff
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