Title: Bank productivity measurement using Hicks-Moorsteen indices: evidence from Indian public sector banks

Authors: Hitesh Arora; Padmasai Arora

Addresses: FORE School of Management, B-18, Qutab Institutional Area, New Delhi - 110 016, India. ' Keshav Mahavidyalaya, University of Delhi, H-4-5 Zone, Pitampura, Delhi - 110 034, India

Abstract: The aim of this paper is to examine productivity growth in public sector banks (PSBs) in India in post-liberalisation period from 1991-1992 to 2008-2009. Total factor productivity (TFP) in Indian PSBs is computed using Hicks-Moorsteen index numbers as given by O'Donnell (2010a). The paper is perhaps the first study that focuses exclusively on productivity in Indian PSBs. It also compares and contrasts productivity growth results for Nationalised Banks (NBs) and State Bank of India Group (SBIG). Results show that Indian PSBs have experienced positive productivity growth since liberalisation. Also, there exists significant difference in the productivity growth experienced by SBIG and NBs with the latter having experienced higher TFP growth. The difference has been traced to greater technological progress experienced in NBs rather than to the effect of higher efficiency gains.

Keywords: TFP; total-factor productivity; public sector banks; productivity index; John Hicks; Richard Moorsteen; productivity growth; post-liberalisation; Christopher O'Donnell; nationalised banks; State Bank of India; technological progress; efficiency gains; business performance; performance management; efficiency management; service sector organisations.

DOI: 10.1504/IJBPM.2012.047302

International Journal of Business Performance Management, 2012 Vol.13 No.3/4, pp.386 - 407

Received: 08 May 2021
Accepted: 12 May 2021

Published online: 15 Jun 2012 *

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