A non-convex meta-frontier Malmquist index for measuring productivity over time

This article proposes a non-convex meta-frontier Malmquist index for measuring productivity over time, where the panel data comprise groups of decision making units (DMUs) operating under the influence of different local technologies. The suggested approach overcomes a weakness of the conventional meta-frontier Malmquist index, which implicitly neglects that the technology under which each group of DMUs operates can change over time. This negligence may lead to a poor approximation of the meta-frontier and accordingly to misleading results and wrong managerial conclusions. The new Malmquist index and its properties will be illustrated by means of an empirical application to KONE Corporation, which is recognized as one of the global leaders in the elevator and escalator industry.