Journal of Productivity Analysis

, Volume 25, Issue 1–2, pp 25–41 | Cite as

Malmquist Indexes Using a Geometric Distance Function (GDF). Application to a Sample of Portuguese Bank Branches

  • Maria Conceição A. Silva Portela
  • Emmanuel Thanassoulis


Traditional approaches to calculate total factor productivity (TFP) change through Malmquist indexes rely on distance functions. In this paper we show that the use of distance functions as a means to calculate TFP change may introduce some bias in the analysis, and therefore we propose a procedure that calculates TFP change through observed values only. Our total TFP change is then decomposed into efficiency change, technological change, and a residual effect. This decomposition makes use of a non-oriented measure in order to avoid problems associated with the traditional use of radial oriented measures, especially when variable returns to scale technologies are to be compared. The proposed approach is applied in this paper to a sample of Portuguese bank branches.


Efficiency Malmquist Indexes Bank Branches 


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Copyright information

© Springer Science+Business Media, Inc. 2006

Authors and Affiliations

  • Maria Conceição A. Silva Portela
    • 1
  • Emmanuel Thanassoulis
    • 2
  1. 1.Universidade Católica Portuguesa, Centro Regional do PortoPortoPortugal
  2. 2.Aston Business SchoolBirminghamU.K

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