Decomposition of productivity growth among the cooperative banks in Jammu and Kashmir (India)

This paper uses the non-parametric Malmquist productivity index to investigate the total productivity change among the cooperative banks in Jammu and Kashmir from 2004 to 2019. Analysing the peculiarities of cooperative banks' productivity is essential because if productivity has increased, it should be reflected in their performance, lower client pricing, and enhanced quality services. To examine productivity changes when choices of inputs and outputs are varied, we used two distinct approaches, the intermediation approach and the income approach. Our findings show that average TFP estimates varied widely between the cooperative banks over the years. Compared to the intermediation approach, TFP growth was significantly higher than the income approach. Further, the productivity gains were driven mainly by efficiency change rather than the technological change component. Our findings have important policy implications that can serve important use to the policymakers and regulators, allowing them to devise effective methods for the cooperative banks so that they can remain competitive and sustainable.