Measuring the Development of Efficiency and Productivity of Banks in the Visegrad Group: An Application of Hicks-Moorsteen Total Factor Productivity index

Abstract

The research on the banking efficiency all around the world has been one of the main topics for the international financial sectors over the last years. The special case is in Europe. Some of the countries are in the European Union. The European Commission creates the rules for safer and sounder financial sector in these countries. In the past, these rules brought a lot of controversy whether they help to all countries in the European Union or just some of them. The purpose of this article is to determine the development of different types of efficiencies for banking industry in the Visegrad Group. Generally, the development is measured by the Malmquist approach. Different type of index is used in this article, more precisely the Hicks-Moorsteen Total Factor Productivity index. It is one of the alternative indexes. The results have showed that the model with the variable return to scale assumption is better for the use in banking industry in the Visegrad Group, as this model is more precise about the results.

Keywords

• ccr model
• vrs model
• the visegrad group
• hicks-moorsteen tfp index
• efficiency