Performance Measure of Commercial Bank
Performance Measure for the Commercial Banks in Bangladesh: An Application of Total Factor Productivity
A A Rushdi
Office of Research and Publications (ORP) American International University-Bangladesh (AIUB)
Working Paper No. AIUB-BUS-ECON-2009-01
Citation
A A Rushdi (2009). Performance Measure for the Commercial Banks in Bangladesh: An Application of Total Factor Productivity. AIUB Bus Econ Working Paper Series, No 2009-01, http://orp.aiub.edu/WorkingPaper/WorkingPaper.aspx?year=2009
February 2009
Copyright © 2009 American International University-Bangladesh (AIUB)
1.
Introduction
The performance evaluation of business has taken high profile in the climate of micro-economic reform in the recent past. The real wealth of Bangladesh can be increased by increasing the inputs available to the country. That is by discovering new resources and using the existing resources more efficiently. Efficiency gains in the banking sector of the country will make the country domestically and internationally more competitive and capable of generating more income and employment opportunities in the country. An adequate assessment of efficiency gains requires a range of financial, operational and economic indicators to be applied including Partial Factor Productivity (PFP) and Total Factor Productivity (TFP). Productivity growth is considered to be the best way to measure international competitiveness and economic growth. Estimates of TFP measures will provide rates of growth in the productive efficiency of labour and capital. Relative growth rates will suggest whether TFP growth was predominantly biased towards saving labour or saving capital and other inputs. To date there has not been any serious study on TFP in the Banking sector of Bangladesh. The present study is an attempt to bridge this gap.
1.2 Plan of the study
Section two of the paper divides the performance indicators under three broad headings and discusses advantages and disadvantages of
A A Rushdi
Office of Research and Publications (ORP) American International University-Bangladesh (AIUB)
Working Paper No. AIUB-BUS-ECON-2009-01
Citation
A A Rushdi (2009). Performance Measure for the Commercial Banks in Bangladesh: An Application of Total Factor Productivity. AIUB Bus Econ Working Paper Series, No 2009-01, http://orp.aiub.edu/WorkingPaper/WorkingPaper.aspx?year=2009
February 2009
Copyright © 2009 American International University-Bangladesh (AIUB)
1.
Introduction
The performance evaluation of business has taken high profile in the climate of micro-economic reform in the recent past. The real wealth of Bangladesh can be increased by increasing the inputs available to the country. That is by discovering new resources and using the existing resources more efficiently. Efficiency gains in the banking sector of the country will make the country domestically and internationally more competitive and capable of generating more income and employment opportunities in the country. An adequate assessment of efficiency gains requires a range of financial, operational and economic indicators to be applied including Partial Factor Productivity (PFP) and Total Factor Productivity (TFP). Productivity growth is considered to be the best way to measure international competitiveness and economic growth. Estimates of TFP measures will provide rates of growth in the productive efficiency of labour and capital. Relative growth rates will suggest whether TFP growth was predominantly biased towards saving labour or saving capital and other inputs. To date there has not been any serious study on TFP in the Banking sector of Bangladesh. The present study is an attempt to bridge this gap.
1.2 Plan of the study
Section two of the paper divides the performance indicators under three broad headings and discusses advantages and disadvantages of
References: 7 For further details, see Rushdi (1994), pp.42-43.