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Disaggregation Analysis of Commercial Bank's Productivity Growth in Indonesia

16 Pages Posted: 25 Sep 2013  

Vergina Hapsari

Universitas Indonesia, Graduate School of Management

Viverita D.

Department of Management Faculty of Economics and Business Universitas Indonesia

Date Written: September 25, 2013

Abstract

This study investigates the sources of commercial bank’s productivity growth in Indonesia over period 2003-2011 using Input Slack-based Productivity Index (ISP) that disaggregates total factor productivity change into each input productivity change. Funds, capital, and number of employees are chosen as input variables, whereas loans and other earning assets are the outputs. By classifying bank based on total assets, this study finds that small banks show higher productivity growth than large banks, in which the growth is mainly driven by technical progress in capital management. Moreover, the productivity growth of large banks is mainly attributed to efficiency change in funds management.

Keywords: Bank, input slack-based productivity index, productivity growth, technical change, efficiency change

JEL Classification: G21

Suggested Citation

Hapsari, Vergina and D., Viverita, Disaggregation Analysis of Commercial Bank's Productivity Growth in Indonesia (September 25, 2013). Universitas Indonesia, Graduate School of Management Research Paper No. 13-69. Available at SSRN: https://ssrn.com/abstract=2330705 or http://dx.doi.org/10.2139/ssrn.2330705

Vergina Hapsari

Universitas Indonesia, Graduate School of Management ( email )

Depok, West Java 16424
Indonesia

Viverita D. (Contact Author)

Department of Management Faculty of Economics and Business Universitas Indonesia ( email )

Depok, West Java 16424
Indonesia
+62217270164 (Phone)
+622178849155 (Fax)

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