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Productivity growth decomposition with FEIV approach: Rethinking Thai commercial banks after the financial crisis
Journal
Economic Modelling,
Publisher(s)
Scopus
University of the Thai Chamber of Commerce
Date Issued
2011
Author(s)
Other Contributor(s)
University of the Thai Chamber of Commerce. Research Support Office
Abstract
To cope with the Asian Financial Crisis, Thai commercial banks have gone through a reconstructing period. This study aims to decompose the Total Factor Productivity growth (TFP) for Thai commercial banking industry with an output distance function.With an unbalanced panel dataset, we used the Fixed Effect (FE) model with Instrumental Variables (IV) to estimate the TFP growth empirically. We found the technical inefficiency change and scale effects were the two major contributors to the recent growth, while the input price effect of the premises and equipment was the major preventer of the growth. Moreover, the Thaicommercial banking industry produced in decreasing return to scale, and the inputoutput allocation was not at the profit maximization optimum under the exogenous prices.
Subject(s)
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public
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This work is protected by copyright. Reproduction or distribution of the work in any format is prohibited without written permission of the copyright owner.
Rights Holder(s)
University of the Thai Chamber of Commerce
Bibliographic Citation
P. Rangkakulnuwat, H. Holly Wang (2011) Productivity growth decomposition with FEIV approach: Rethinking Thai commercial banks after the financial crisis. Economic Modelling, Vol.28 No.6, 2579-2588.
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