Apart from the well-known weaknesses of the standard Malmquist productivity index related to infeasibility and not accounting for slacks, already addressed in the literature, we identify a new and significant drawback of the Malmquist-Luenberger index decomposition that questions its validity as...

In for-profit organizations, profit efficiency decomposition is considered important since estimates on profit drivers are of practical use to managers in their decision making. Profit efficiency is traditionally due to two sources - technical efficiency and allocative efficiency. The...