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Analysing Productivity Changes Using the Bootstrapped Malmquist Approach: The Case of the Iranian Banking Industry

Author

Listed:
  • Arjomandi, Amir
  • Valadkhani, Abbas
  • Harvie, Charles
Abstract
This study employs various bootstrapped Malmquist indices and efficiency scores to investigate the effects of government regulation on the performance of the Iranian banking industry over the period 2003-2008. An alternative decomposition of the Malmquist index, introduced by Simar and Wilson (1998a), is also applied to decompose technical changes further into pure technical change and changes in scale efficiency. A combination of these approaches facilitates a robust and comprehensive analysis of Iranian banking industry performance. While this approach is more appropriate than the traditional Malmquist approach, for the case of banking efficiency studies, it has not previously been conducted for any developing country’s banking system. The results obtained show that although, in general, the regulatory changes had different effects on individual banks, the efficiency and productivity of the overall industry declined after regulation. We also find that productivity had positive growth before regulation mainly due to improvements in pure technology, and that government ownership had an adverse impact on the efficiency level of state-owned banks. The bootstrap approach demonstrates that the majority of estimates obtained in this study are statistically significant.

Suggested Citation

  • Arjomandi, Amir & Valadkhani, Abbas & Harvie, Charles, 2011. "Analysing Productivity Changes Using the Bootstrapped Malmquist Approach: The Case of the Iranian Banking Industry," MPRA Paper 50397, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:50397
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    References listed on IDEAS

    as
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    Cited by:

    1. Mad Ithnin Salleh & Shariffah Nur Illiana Syed Ismail & Nurul Fadly Habidin & Nor Azrin Md Latip, 2016. "Efficiency and Productivity Changes of the Malaysian Community Colleges," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 6(12), pages 407-424, December.
    2. Amir Moradi-Motlagh & Ali Salman Saleh, 2014. "Re-Examining the Technical Efficiency of Australian Banks: A Bootstrap DEA Approach," Australian Economic Papers, Wiley Blackwell, vol. 53(1-2), pages 112-128, June.
    3. Moradi-Motlagh, Amir & Babacan, Alperhan, 2015. "The impact of the global financial crisis on the efficiency of Australian banks," Economic Modelling, Elsevier, vol. 46(C), pages 397-406.
    4. Apostolos Christopoulos & Ioannis Dokas & Sofia Katsimardou & Eleftherios Spyromitros, 2022. "The Malmquist Productivity measure for UK-listed firms in the aftermath of the global financial crisis," Operational Research, Springer, vol. 22(2), pages 1617-1634, April.

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    More about this item

    Keywords

    Regulation; Productivity; Banking; Data envelopment analysis; Bootstrap; Malmquist indices;
    All these keywords.

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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