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Productivity change of microfinance institutions in Kenya: A bootstrap Malmquist approach
Institution:1. Department of Management, Information and Production Engineering, University of Bergamo, Bergamo, Italy;2. Department of Management, Information and Production Engineering, Cisalpino Institute for Comparative Studies in Europe, University of Bergamo, Bergamo, Italy;1. Universidade Federal de São Paulo, Brazil;2. University Nove de Julho, São Paulo, Brazil;1. Department of Computer Science, University of Saskatchewan, 110 Science Place, Saskatoon, SK, Canada S7N 5C9;2. School of Economics and Management, Nanjing University of Science and Technology, China;1. College of Business Administration, Marquette University, Milwaukee, WI 53201-1881, USA;2. Sheldon B. Lubar School of Business, University of Wisconsin–Milwaukee, Milwaukee, WI 53201, USA;1. Winchester Business School, University of Winchester, United Kingdom;2. Edinburgh Business School, Heriot Watt University, United Kingdom;1. Marketing, Brock School of Business, Samford University, 800 Lakeshore Drive, Birmingham, AL 35229, USA;2. Management, School of Business Administration, University of Mississippi, 236 Holman Hall, University, MS 38677, USA;3. School of Business & Engineering, University of Southern Indiana, 8600 University Boulevard, Evansville, IN 47712, USA
Abstract:This paper uses a DEA (Data Envelopment Analysis) based Malmquist approach to investigate the changes in productivity of 20 Kenyan microfinance institutions (MFIs) over the period 2009–2012. A bootstrap procedure is employed to determine whether the changes in Malmquist index and its components are statistically significant. Results show that MFIs have experienced about 7% annual productivity progress on average, which is mainly attributable to technological advances. A second-stage bootstrapped regression analysis is employed to examine the impact of several environmental variables on productivity change measures. Results show that matured MFIs tend to have a lower productivity compared to their younger counterparts. Results also reveal that higher return-on-assets associates with the productivity gain and technological improvements.
Keywords:Microfinance  Data envelopment analysis  Malmquist  Efficiency  Productivity  Bootstrap
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