A parametric distance function approach for Malmquist productivity index estimation

Malmquist indexes of productivity are generally estimated using index numbe r techniques or non-parametric frontier approaches. The aim of this paper i s to show that Malmquist indexes can be estimated in a similar way using pa rametric-deterministic or parametric-stochastic frontier approaches. To all ow a multi-output multi-input technology and for technical change in produc tion, we adopt an output distance function which is specified in a translog form. We then show that using the estimated parameters, several radial dis tance functions can be calculated and combined in order to estimate and dec ompose the productivity index. Finally, this approach is applied to a panel of Spanish insurance companies. The main results confirm those generally o btained for financial services: very low rates of growth and technical chan ge in spite of a rapid deregulation process and expansion of activity.