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Regulatory Changes and Productivity of the Banking Sector in the Indian Sub-Continent

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Author Info

  • Shabbar Jaffry

    (Department of Economics, Portsmouth Business School, University of Portsmouth, Portsmouth, UK.)

  • Yaseen Ghulam

    (Department of Economics, Portsmouth Business School, University of Portsmouth, Portsmouth, UK.)

  • Sean Pascoe

    (Department of Economics, Portsmouth Business School, University of Portsmouth, Portsmouth, UK.)

  • Joe Cox

    (Department of Economics, Portsmouth Business School, University of Portsmouth, Portsmouth, UK.)

Abstract

This study seeks to measure changes in technical efficiency levels within the banking sectors of the Indian sub-continent: specifically India, Pakistan, and Bangladesh, over the period 1993–2002. This study is done in the context of a number of sweeping deregulations across the sub-continent in the early 1990s, and the possible effect these may have had upon efficiency levels. A Malmquist Index of TFP change over the time-period in question is employed, along with a Tobit regression, in order to determine whether these significant measures of deregulation and financial modernisation have had the desired effect upon the Indian sub-continent in terms of technical efficiency levels. It is found that technical efficiency both increases and converges across the Indian sub-continent in response to deregulation. India and Bangladesh experienced immediate and sustained growth in technical efficiency, whereas Pakistan endured a reduction in efficiency during the middle years of the study, before rebounding to levels comparable to the rest of the sub-continent in the latter years of the study. These results indicate that the measures employed to modernise the financial sectors of these respective countries have had the desired effects upon levels of technical efficiency.

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Bibliographic Info

Article provided by Pakistan Institute of Development Economics in its journal The Pakistan Development Review.

Volume (Year): 44 (2005)
Issue (Month): 4 ()
Pages: 1021-1047

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Handle: RePEc:pid:journl:v:44:y:2005:i:4:p:1021-1047

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Citations

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Cited by:
  1. Sunil Kumar, 2013. "Banking reforms and the evolution of cost efficiency in Indian public sector banks," Economic Change and Restructuring, Springer, vol. 46(2), pages 143-182, May.
  2. Boon L Lee, 2012. "Efficiency and Productivity of Singapore's Manufacturing Sector 2001-2010: An analysis using Simar and Wilson's (2007) bootstrapped truncated approach," School of Economics and Finance Discussion Papers and Working Papers Series 283, School of Economics and Finance, Queensland University of Technology.
  3. Muhammad Irfan, 2010. "A Review of the Labour Market Research at PIDE 1957-2009," PIDE Books, Pakistan Institute of Development Economics, number 2010:1 edited by Rashid Amjad & Aurangzeb A. Hashmi, September.
  4. Boon Lee, 2013. "Productivity Performance of Singapore’s Retail Sector: A Two-Stage Non-Parametric Approach," Economic Analysis and Policy (EAP), Queensland University of Technology (QUT), School of Economics and Finance, vol. 43(1), pages 67-78, March.
  5. Fadzlan Sufian, 2012. "For which option is credit risk more representative on China banks' total factor productivity: Efficiency change or technological progress?," China Finance Review International, Emerald Group Publishing, vol. 2(2), pages 180-202, April.
  6. Sunil Kumar & Rachita Gulati, 2009. "Did efficiency of Indian public sector banks converge with banking reforms?," International Review of Economics, Springer, vol. 56(1), pages 47-84, March.
  7. Carlos Pombo & Rodrigo Taborda, 2004. "Perfomance and Efficiency in Colombia's Power Distribution Sistem: Effects of the 1994 Reform," BORRADORES DE INVESTIGACIÓN 006942, UNIVERSIDAD DEL ROSARIO.
  8. Sufian, Fadzlan, 2011. "Banks total factor productivity change in a developing economy: Does ownership and origins matter?," Journal of Asian Economics, Elsevier, vol. 22(1), pages 84-98, February.

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