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The effects of privatization and consolidation on bank productivity: comparative evidence from Italy and Germany

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  • Fiorentino, Elisabetta
  • Vincenzo, Alessio De
  • Heid, Frank
  • Karmann, Alexander
  • Koetter, Michael

Abstract

The Italian and German banking systems shared similar characteristics early in the 1990s but have evolved in different directions since then: Italy privatized its publicly-owned banks while Germany has maintained a large share of state-owned savings banks. Contemporaneously, banks in both markets engaged heavily in mergers and acquisitions. We analyze how these activities have affected banks' productivity in the period 1994-2004, differentiating between technical change, efficiency change and scale economies. We find that privatized banks experienced a significant increase in productivity, especially if they subsequently merged with other banks. German banks were still able to increase their productivity through consolidation. --

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Bibliographic Info

Paper provided by Deutsche Bundesbank, Research Centre in its series Discussion Paper Series 2: Banking and Financial Studies with number 2009,03.

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Date of creation: 2009
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Handle: RePEc:zbw:bubdp2:200903

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Keywords: Banking market integration; deregulation; total factor productivity; Italy; Germany;

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Cited by:
  1. Cristian Barra & Sergio Destefanis & Giuseppe Lubrano Lavadera, 2013. "Regulation and the Crisis: The Efficiency of Italian Cooperative Banks," CSEF Working Papers 338, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  2. Barbara Casu & Alessandra Ferrari & Claudia Girardone & John O.S. Wilson, 2014. "Integration, Productivity and Technological Spillovers: Evidence for Eurozone Banking Industries," Economics & Management Discussion Papers em-dp2014-01, Henley Business School, Reading University.
  3. Philip Molyneux, 2013. "Performance in European Banking: Productivity, Profitability and Employment Trends," SUERF 50th Anniversary Volume Chapters, SUERF - The European Money and Finance Forum.

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