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Technical progress in Spanish banking: 1985-1994

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Author Info

  • Javier Quesada Ibáñez

    ()
    (Instituto Valenciano de Investigaciones Económicas)

  • Joaquín Maudos Villarroya

    (Instituto Valenciano de Investigaciones Económicas)

  • José Manuel Pastor Monsálvez

    (Instituto Valenciano de Investigaciones Económicas)

Abstract

Over the last decade, the Spanish banking sector has undergone a radical structural change. The old bank statu quo has broken down due both to the impact of technical change and to a strong deregulation process, that has given way to a much freer and competitive economic environment. Similarly, the rapid and intensive diffusion of new technologies on information has modified the banking industry in an important way. The effect of these three phenomena (technical change, deregulation and increased competition) on production costs for the Spanish savings banks are the objectives of this study. We review three alternative econometric methods of approaching the impact of technical change. Since we have available an incomplete data panel and with the aim of checking on the possibility that each firm has a particular level of efficiency -captured by the fixed effect-, we estimate the function using both techniques, pooling data and panel data. In other words, we estimate a mean costs function (OLS estimator) as well as a frontier costs function (panel data techniques).We address the question of whether technical progress affects banks in a different way according to size and, finally, with the purpose of isolating our estimates of technical change from the evolution of financial costs and, therefore, of the role of competition and deregulation, we estimate a cost function using only operating costs. In this way we obtain a stricter measure of the impact of technical change. En la última década, el sector bancario español ha estado sometido a un radical cambio estructural. El viejo statu qua bancario se rompió debido al impacto del cambio técnico y al fuerte proceso desregulador. Adicionalmente, la rápida difusión de las nuevas tecnologías de la información ha modificado la industria bancaria de forma importante. El objetivo de este estudio es analizar el efecto de estos tres fenómenos (cambio técnico, desregulación e incremento de la competencia) en los costes de producción de las cajas de ahorro españolas. Para ello se utilizan tres métodos econométricos alternativos para analizar el impacto del cambio técnico.Ante la disponibilidad de datos de panel y con el objetivo de considerar la posibilidad de que cada empresa presente un nivel de eficiencia individual -recogido por el efecto fijo- se realizan las estimaciones considerando una función de costes media (estimador de MCO) así como una función de costes frontera (mediante técnicas de panel).Se analiza si el progreso técnico afecta a los bancos de manera diferente según su tamaño, finalmente, con el propósito de aislar las estimaciones del cambio técnico de la evolución de los costes financieros y, por tanto, de la competencia y desregulación, se estima una función de costes utilizando sólo los costes operativos. De esta forma se obtiene una medida más estricta del impacto del cambio técnico.

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File URL: http://www.ivie.es/downloads/docs/wpasec/wpasec-1996-06.pdf
File Function: Fisrt version / Primera version, 1996
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Bibliographic Info

Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie EC with number 1996-06.

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Length: 30 pages
Date of creation: Apr 1996
Date of revision:
Publication status: Published by Ivie
Handle: RePEc:ivi:wpasec:1996-06

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Related research

Keywords: Cambio técnico; eficiencia; bancos Technical change; efficiency; banks;

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Cited by:
  1. Vicente Calabuig Alcantara, 1997. "Ineficiencias en las negociaciones entre dos agentes completamente informados," Working Papers. Serie EC 1997-03, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).

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