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Assessing output and productivity growth in the banking industry

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  • Athanasoglou, Panayiotis
  • Georgiou, Evangelia
  • Staikouras, Christos

Abstract

This paper assesses the evolution of output and productivity in the Greek banking industry for the period 1990-2006. Three main categories of bank output were estimated based on modern theoretical approaches, while for the aggregation and estimation of output and inputs and the estimation of productivity (partial and total factor) we relied on the index number method (Tornqvist index). Additionally, we considered the effect of labor quality on banks’ productivity and using a growth accounting framework we examined the contribution of total factor productivity (TFP) to bank output growth. The results show that bank output and labor productivity increased considerably during the period under examination, outpacing the respective GDP growth and labor productivity of the Greek economy. Capital productivity and TFP of the Greek banking industry have also improved remarkably mainly since 1999, as a result of the structural changes that took place within the industry, capital investments (mainly in IT equipment) as well as improvement in the quality of human capital.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 31996.

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Date of creation: Nov 2008
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Handle: RePEc:pra:mprapa:31996

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Keywords: Bank output; user-cost approach; total factor productivity; Tornqvist index; growth accounting; labor quality;

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Cited by:
  1. Halkos, George E. & Tzeremes, Nickolaos G., 2013. "Estimating the degree of operating efficiency gains from a potential bank merger and acquisition: A DEA bootstrapped approach," Journal of Banking & Finance, Elsevier, vol. 37(5), pages 1658-1668.
  2. Dimitrios Sideris, 2011. "Optimum currency areas, structural changes and the endogeneity of the OCA criteria: evidence from six new EU member states," Applied Financial Economics, Taylor & Francis Journals, vol. 21(4), pages 195-206.
  3. Vasilis Droucopoulos & Panagiotis Chronis, 2010. "“Assessing market dominance”: a comment and an extension," Working Papers 109, Bank of Greece.

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