Malaysian post merger banks’ productivity: application of Malmquist productivity index

Abstract

The nature and extent of productivity change of ten commercial banks in Malaysia is analysed over the period 2000‐2001. Utilising non‐parametric methodology, Data Envelopment Analysis (DEA) and Malmquist total factor productivity index (MPI), individual bank efficiency and productivity changes which took place within this period is estimated. The MPI calculated within the framework of DEA further decompose productivity growth into technical efficiency change and technological change. The results from this analysis indicate that total factor productivity increased in all eight banks except for EON, which remain the same while PBB, recorded a decrease in productivity. AFB recorded the highest growth in total factor productivity. The growth in productivity is attributed to technological change rather than technical efficiency change.

Citation

Krishnasamy, G., Hanuum Ridzwa, A. and Perumal, V. (2004), "Malaysian post merger banks’ productivity: application of Malmquist productivity index", Managerial Finance, Vol. 30 No. 4, pp. 63-74. https://doi.org/10.1108/03074350410769038