This article proposes a method of estimating productivity growth using an estimated profit function. The approach has the advantage of incorporating endogenous changes in profit-maximizing output levels that would result from productivity changes. As with the cost function, it can be easily adapted
A nonparametric approach to measurement of efficiency and technological change: The case of large U.S. commercial banks
β Scribed by Elyas Elyasiani; Seyed M. Mehdian
- Publisher
- Springer
- Year
- 1990
- Tongue
- English
- Weight
- 716 KB
- Volume
- 4
- Category
- Article
- ISSN
- 0920-8550
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β¦ Synopsis
The purpose of this paper is to derive the efficiency measures and the rate of technological change for a sample of large U.S. commercial banks by employing a nonparametric technique. This technique is used to construct a multiproduct production frontier relative to which the efficiency measures ,of the banks in the sample are calculated and the displacement of which over time provides a measure of the rate of technological change. The empirical results indicate that the relevant frontier shifted inward between 1980 and 1985 reflecting a high pace of technological advancement achieved by the banks in the sample. The pace varied significantly across the banks with some banks even regressing over time.
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