Analyzing profit efficiency of banks in India with undesirable output – Nerlovian profit indicator approach
The objective of this paper is to provide a holistic approach to measure the profit efficiency of banks, factoring desirable/undesirable outputs, using Nerlovian profit indicator approach. The profit inefficiency of banks has been decomposed into technical and allocation inefficiency using direction...
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Elsevier
2014-12-01
|
| Series: | IIMB Management Review |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S0970389614000901 |
| _version_ | 1818535526786924544 |
|---|---|
| author | A.R. Jayaraman M.R. Srinivasan |
| author_facet | A.R. Jayaraman M.R. Srinivasan |
| author_sort | A.R. Jayaraman |
| collection | DOAJ |
| description | The objective of this paper is to provide a holistic approach to measure the profit efficiency of banks, factoring desirable/undesirable outputs, using Nerlovian profit indicator approach. The profit inefficiency of banks has been decomposed into technical and allocation inefficiency using directional distance function. Results reveal that profit inefficiency of banks is primarily due to allocative inefficiency and the impact of technical inefficiency on profit inefficiency is minimal compared to allocative inefficiency, which indicates that banks need to focus on optimal utilization of input–output mix to enhance profit efficiency. |
| first_indexed | 2024-12-11T18:26:04Z |
| format | Article |
| id | doaj.art-90ae7d90fbcc404eb4741704c74327b7 |
| institution | Directory Open Access Journal |
| issn | 0970-3896 |
| language | English |
| last_indexed | 2024-12-11T18:26:04Z |
| publishDate | 2014-12-01 |
| publisher | Elsevier |
| record_format | Article |
| series | IIMB Management Review |
| spelling | doaj.art-90ae7d90fbcc404eb4741704c74327b72022-12-22T00:55:05ZengElsevierIIMB Management Review0970-38962014-12-0126422223310.1016/j.iimb.2014.09.003Analyzing profit efficiency of banks in India with undesirable output – Nerlovian profit indicator approachA.R. Jayaraman0M.R. Srinivasan1Department of Statistics and Information Management, Reserve Bank of India, Bangalore, Karnataka, IndiaDepartment of Statistics, University of Madras, Chennai, Tamil Nadu, IndiaThe objective of this paper is to provide a holistic approach to measure the profit efficiency of banks, factoring desirable/undesirable outputs, using Nerlovian profit indicator approach. The profit inefficiency of banks has been decomposed into technical and allocation inefficiency using directional distance function. Results reveal that profit inefficiency of banks is primarily due to allocative inefficiency and the impact of technical inefficiency on profit inefficiency is minimal compared to allocative inefficiency, which indicates that banks need to focus on optimal utilization of input–output mix to enhance profit efficiency.http://www.sciencedirect.com/science/article/pii/S0970389614000901Nerlovian profit indicatorProfit efficiencyDirectional distance functionData envelopment analysisBanking |
| spellingShingle | A.R. Jayaraman M.R. Srinivasan Analyzing profit efficiency of banks in India with undesirable output – Nerlovian profit indicator approach IIMB Management Review Nerlovian profit indicator Profit efficiency Directional distance function Data envelopment analysis Banking |
| title | Analyzing profit efficiency of banks in India with undesirable output – Nerlovian profit indicator approach |
| title_full | Analyzing profit efficiency of banks in India with undesirable output – Nerlovian profit indicator approach |
| title_fullStr | Analyzing profit efficiency of banks in India with undesirable output – Nerlovian profit indicator approach |
| title_full_unstemmed | Analyzing profit efficiency of banks in India with undesirable output – Nerlovian profit indicator approach |
| title_short | Analyzing profit efficiency of banks in India with undesirable output – Nerlovian profit indicator approach |
| title_sort | analyzing profit efficiency of banks in india with undesirable output nerlovian profit indicator approach |
| topic | Nerlovian profit indicator Profit efficiency Directional distance function Data envelopment analysis Banking |
| url | http://www.sciencedirect.com/science/article/pii/S0970389614000901 |
| work_keys_str_mv | AT arjayaraman analyzingprofitefficiencyofbanksinindiawithundesirableoutputnerlovianprofitindicatorapproach AT mrsrinivasan analyzingprofitefficiencyofbanksinindiawithundesirableoutputnerlovianprofitindicatorapproach |