TY - JOUR
T1 - The sources of bank productivity growth in China during 2002-2009
T2 - A disaggregation view
AU - Chang, Tzu Pu
AU - Hu, Jin-Li
AU - Chou, Ray Yeutien
AU - Sun, Lei
PY - 2012/7/1
Y1 - 2012/7/1
N2 - This study investigates the sources of bank productivity growth in China over the period 2002-2009. In order to perform this research, we propose an advanced index - input slack-based productivity index (ISP) - a model that disaggregates total factor productivity growth into each input productivity change. Funds, capital, and employees are chosen as the inputs, whereas loans and other earning assets are outputs in this study. Our results show that technological gains transcend the efficiency regressions and result in total factor productivity growth. More specifically, technical progress in capital productivity reveals the dominant force behind the total factor technical change and productivity improvement. In addition, this paper uses these disaggregation terms to find out the competitive advantages and disadvantages of input usages for each Chinese bank. These findings indicate that the ISP index provides more insights than traditional total factor productivity indices.
AB - This study investigates the sources of bank productivity growth in China over the period 2002-2009. In order to perform this research, we propose an advanced index - input slack-based productivity index (ISP) - a model that disaggregates total factor productivity growth into each input productivity change. Funds, capital, and employees are chosen as the inputs, whereas loans and other earning assets are outputs in this study. Our results show that technological gains transcend the efficiency regressions and result in total factor productivity growth. More specifically, technical progress in capital productivity reveals the dominant force behind the total factor technical change and productivity improvement. In addition, this paper uses these disaggregation terms to find out the competitive advantages and disadvantages of input usages for each Chinese bank. These findings indicate that the ISP index provides more insights than traditional total factor productivity indices.
KW - Banking
KW - China
KW - Efficiency change
KW - Input slack-based productivity index
KW - Productivity growth
KW - Technical change
UR - http://www.scopus.com/inward/record.url?scp=84862778513&partnerID=8YFLogxK
U2 - 10.1016/j.jbankfin.2012.03.003
DO - 10.1016/j.jbankfin.2012.03.003
M3 - Article
AN - SCOPUS:84862778513
SN - 0378-4266
VL - 36
SP - 1997
EP - 2006
JO - Journal of Banking and Finance
JF - Journal of Banking and Finance
IS - 7
ER -