Efficiency assessment of microfinance institutions: using DEA with weighted Russell directional distance model

The influence of SYRIZA-ANEL Greek health policies on hospital efficiency

BACKGROUND

We analyse the impact of the three following categories of Health Policies (HP) carried out by the Greek SYRIZA-ANEL governments on the efficiency of Greek public general hospitals. These governments have implemented policies intended to change the rate of contributions to publicly funded healthcare (PCnH), policies to affect the volume and quality of publicly funded health care (PVQH) and those intended to affect the costs of publicly funded healthcare (PCH). A literary review of the PCnH. PVQH and PCH policies of the Greek SYRIZA-ANEL governments was carried out and an efficiency window-DEA study was executed using data from the Ministry of Health (MoH) and the Greek Statistical Authority (ELSTAT).

METHODS

The study was designed to assess the impact of PCnH. PVQH and PCH policies by the Greek SYRIZA-ANEL governments on the efficiency of Greek general hospitals. The data was collected from HEAL-Link scientific journals. Information on HPs was extracted from the work collected. The values of inputs and outputs used for the efficiency study were obtained from ELSTAT and Greek MoH databases.

RESULTS

HPs of the Greek SYRIZA-ANEL governments extend to all three HP categories of the sample used. These policies have a dual effect on both the inputs and outputs used in efficiency. Efficiency values exhibit fluctuations with good and bad years. The SYRIZA-ANEL governments seek to ensure more equality in access to health services. Some of the policies reduce costs and have a positive impact on efficiency, while others have the opposite effect. The increase in outputs achieved as a result of health policies is counter balanced by an increase in inputs.

CONCLUSIONS

The PCnH, PVQH and PCH policies of the SYRIZA-ANEL governance seem to have a dual orientation: some policies reduce the cost of a category and contain the total cost, thus positively contributing to an increase in efficiency. Certain policies are aimed more at fulfilling the criterion of equality in the provision of health services and thus the cost inevitably increases. From the window-DEA study, three relatively "good" years emerge (2015, 2016, 2018) and two "bad years" (2017, 2019). This analysis will be useful for further research on the effect of health policies on hospital efficiency in other countries and periods.

Institutional factors and efficiency performance in the global microfinance industry

Purpose

Measuring the success of microfinance institutions (MFIs) using a single efficiency value and then exploring its determining factors might be misleading. Hence, this study decomposed the efficiency measure into three divisions, namely operational, financial sustainability and social outreach. Subsequently, the authors identified factors affecting these efficiencies in the second stage regression analysis.

Design/methodology/approach

This study employed the network data envelopment analysis approach to evaluate each division of efficiency of 90 MFIs from 2013 to 2018 and used second-stage regression techniques (Tobit and Truncated) to examine the effect of institutional factors.

Findings

The authors’ efficiency analysis revealed that financial sustainability and social outreach were responsible for the low overall efficiency. The second stage analysis revealed the negative influence of institutional factors such as efficiency wage (particularly among small MFIs) on financial sustainability, social outreach and overall efficiencies. Staff turnover reduced operational, financial and overall efficiencies, particularly for large MFIs. The presence of female board members and staff improved the efficiency of MFIs, thus highlighting the pivotal role of women in the success of MFIs. Besides, the effects of regional location of MFIs, regulation and legal status on efficiencies were further discussed.

Originality/value

The study has uniquely evaluated three different types of efficiency in MFIs and employed conventional techniques for the second-stage regression to identify the determinants of efficiency. The findings will enable managers to make appropriate decisions to enhance their organisational efficiency.

Evaluating the Efficiency of Water Distribution Network Sectors Using the DEA-Weight Russell Directional Distance Model: The Case of the City of Valencia (Spain)

In many cities, sectorization projects of the drinking water distribution network have been implemented. This study provides a methodology to evaluate the efficiency of the sectors of a water distribution network by applying a data envelopment analysis weighted Russell directional distance (DEA-WRDD) model. This non-radial DEA model gives the overall efficiency of each unit of analysis, as well as each input, output, and undesirable output considered in the evaluation. The variables used in the analysis provide a multidisciplinary view: economic factors (covering costs), water quality parameters, and technical aspects. The empirical analysis was performed for the sectors of the water distribution network of the city of Valencia (Spain) for the year 2016. In this particular case, the results showed that approximately half of the sectors were efficient. The efficiency values of each variable indicate that the main challenges (faced by the water distribution company) were the optimization of maintenance costs and the reduction of leaks, both of which have an impact on the quality of the distributed water. So, the purpose of this article is to highlight the usefulness of efficiency analysis to help the decision making of managers of sectorized water distribution networks so that they can optimize the management.

The dynamics of Indian energy mix: a two-phase analysis

Purpose

The Indian power sector is dominated by coal. Environmental awareness and advances in techno-economic front have led to a slow but steady shift towards greener alternatives. The distributions of both fossil fuel resources and renewable energy potential are not uniform across the states. Paper attempts to answer how the states are performing in the sector and how the renewable energy and conventional resources are affecting the dynamics.

Design/methodology/approach

The authors employ a two-stage data envelopment analysis (DEA) to rank the performance of Indian states in the power sector. Multi-stage analysis opens up the DEA black-box through disaggregating power sector in two logical sub-sectors. The performance is evaluated from the point-of-view of policy formulating and implementing agencies. Further, an econometric analysis using seemingly unrelated regression equations (SURE) is conducted to estimate the determinants of total and industrial per-capita electricity consumption.

Findings

Efficiency scores obtained from the first phase of analysis happens to be a significant explanatory variable for power consumption. The growth in electricity consumption, which is necessary for economic wellbeing, is positively affected by both renewable and non-renewable sources; but conventional sources have a larger impact on per-capita consumption. Yet, the share of renewables in the energy mix has positive elasticity. Hence, the findings are encouraging, because development in storage technologies, falling costs and policy interventions are poised to give further impetus to renewable sources.

Originality/value

The study is one of the very few where entire spectrum of the Indian power sector is evaluated from efficiency perspective. Further, the second phase analysis gives additional relevant insights on the sector.

Productivity growth, catching-up and technology innovation in microfinance institutions in India: evidence using a bootstrap Malmquist Index approach

Purpose

This paper aims to examine the total factor productivity (TFP) change and its components: efficiency change and technical change in microfinance institutions (MFIs) in India operating from 2005 to 2018. The study also scrutinizes the variations in productivity levels across the distinct organizational form and size groups of MFIs. In addition to this, the authors identify the contextual factors that determine TFP growth, catching-up and technology innovation in MFIs.

Design/methodology/approach

The study employs a smooth homogeneous bootstrap estimation procedure of Simar and Wilson (1999) for obtaining reliable estimates of Malmquist indices –productivity and its components – in a data envelopment analysis (DEA) framework for individual MFIs. In order to identify the determinants of productivity change and its components, the study follows Simar and Wilson's (2007) guidelines and applies a bootstrap truncated regression model. The double bootstrap procedure performs well, both in terms of allowing correct estimation of bias and deriving statistically consistent productivity estimates in the first and root mean square errors in the second stage of the analysis.

Findings

The empirical results reveal that the MFIs have shown average productivity growth of 6.70% during the entire study period. The observed productivity gains are primarily contributed by a larger efficiency increase at the rate of 4.80%, while technical progress occurs at 2.3%. Nonbanking financial companies (NBFC)-MFIs outperformed non-NBFC-MFIs. Small MFIs show the highest TFP growth in terms of size groups, followed by the large MFIs and medium MFIs. The bootstrap truncated regression results suggest that the credit portfolio, size and age of MFIs matter in achieving higher productivity levels.

Practical implications

The practical implication drawn from the study is that the Indian MFI industry might adopt the latest technology and innovations in the products, risk assessment and credit delivery to improve their productivity levels. The industry must focus on enhancing the managerial skill of its employees to achieve a high productivity level.

Originality/value

This study is perhaps the initial attempt to explain the productivity behavior of MFIs in India by deploying a statistically robust double bootstrap procedure in the DEA-based Malmquist Productivity Index (MPI) framework. The authors estimate the bias-adjusted productivity index and its decompositions, which represent more reliable and statistically consistent estimates. For contextual factors responsible for driving productivity change, the study deploys a bootstrap truncated regression approach.

An integrated framework for analysing performance indicators of Indian microfinance institutions: a multi-stakeholder perspective

Purpose

An amalgamation of Decision-Making Trial and Evaluation Laboratory (DEMATEL) and Analytical Network Process (ANP) has been performed to develop a decision-making framework for improving the overall performance of the microfinance institutions. A primary survey was conducted to collect real-time data from the heterogeneous stakeholders of microfinance institutions across India. The validation of the proposed framework is performed by comparing the results against the conventional method of Analytical Hierarchy Process (AHP).

Design/methodology/approach

This study identifies various dimensions and indicators for measuring the performance of Indian microfinance institutions. Additionally, the ranking and prioritisation of the performance dimensions and indicators is obtained by considering the mutual interrelation between them.

Findings

The study indicates that there exists a significant dyadic relationship between financial performance and social performance for improving the overall performance of the microfinance institutions. Governance is found to unidirectionally influence both financial and social performance. Among all the considered dimensions, financial performance of a microfinance institution is the most critical dimension for improving the overall performance. The top five performance indicators of the Indian microfinance institutions are funding source, borrowing and overhead cost, size of the firm, end-use of the money and depth of outreach.

Research limitations/implications

The study was conducted in the context of Indian microfinance institutions; hence the scope of generalisation of the results is limited. This research considers both subjective and objective aspect of the performance dimensions and indicators from the perspective of multiple stakeholders (i.e. firm, society and regulator). The integrated framework is expected to aid in improving overall performance of microfinance institutions by focusing on the most critical (high prioritised) performance indicators.

Originality/value

An integrated DEMATEL-ANP framework is used in the domain of microfinance to assess the performance dimensions. This study is unique in terms of analysing performance of microfinance institutions from the perspective of heterogeneous stakeholders.