Profit, productivity and distribution: Differences across organizational forms - The case of Spanish banks
We examine variations in financial and economic performance as a function of organizational form, and, over time. The forms we consider include Spanish commercial banks, savings banks, and financial cooperatives. We decompose multilateral variation in operating profit, our measure of financial performance, into price and quantity effects. We then decompose the latter into a margin effect and productivity change. Our measure of economic performance, productivity variation, is subsequently disaggregated into technical, cost efficiency, and scale. We find that deregulation and liberalization have acted to narrow performance gaps among organizational forms; this, despite less-than compelling evidence that increased competition has contributed to this convergence. For the Spanish banking system as a whole, the margin effect appears to deliver twice as much financial benefit as do improvements in productivity. Importantly, this finding does not vary across organizational form. Such regularity has an important implication: Incentives for growth are apparently provided by a positive margin rather than by the more elusive benefits of economies of scale and improved cost efficiency.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- E. Grifell-Tatjé & C. A. K. Lovell, 1999.
"Profits and Productivity,"
INFORMS, vol. 45(9), pages 1177-1193, September.
- Caves, Douglas W & Christensen, Laurits R, 1980. "The Relative Efficiency of Public and Private Firms in a Competitive Environment: The Case of Canadian Railroads," Journal of Political Economy, University of Chicago Press, vol. 88(5), pages 958-76, October.
- Subal Kumbhakar & Ana Lozano-Vivas, 2004. "Does deregulation make markets more competitive? Evidence of mark-ups in Spanish savings banks," Applied Financial Economics, Taylor & Francis Journals, vol. 14(7), pages 507-515.
- Vivas, Ana Lozano, 1997. "Profit efficiency for Spanish savings banks," European Journal of Operational Research, Elsevier, vol. 98(2), pages 381-394, April.
- Grifell-Tatje, E. & Lovell, C. A. K., 1997. "The sources of productivity change in Spanish banking," European Journal of Operational Research, Elsevier, vol. 98(2), pages 364-380, April.
- Grifell-Tatje, E. & Lovell, C. A. Knox, 2004. "Decomposing the dividend," Journal of Comparative Economics, Elsevier, vol. 32(3), pages 500-518, September.
- Tortosa-Ausina, Emili & Grifell-Tatje, Emili & Armero, Carmen & Conesa, David, 2008.
"Sensitivity analysis of efficiency and Malmquist productivity indices: An application to Spanish savings banks,"
European Journal of Operational Research,
Elsevier, vol. 184(3), pages 1062-1084, February.
- Emili Tortosa Ausina, 2002. "Sensitivity Analysis Of Efficiency And Malmquist Productivity Indices: An Application To Spanish Savings Banks," Working Papers. Serie EC 2002-30, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Edwards, Franklin R, 1977. "Managerial Objectives in Regulated Industries: Expense-Preference Behavior in Banking," Journal of Political Economy, University of Chicago Press, vol. 85(1), pages 147-62, February.
- Tortosa-Ausina, Emili, 2002. "Exploring efficiency differences over time in the Spanish banking industry," European Journal of Operational Research, Elsevier, vol. 139(3), pages 643-664, June.
- Bernardo Batiz-Lazo, 2004. "Strategic alliances and competitive edge: insights from Spanish and UK banking histories," Business History, Taylor & Francis Journals, vol. 46(1), pages 23-56.
- Emili Grifell-Tatjé & C. A. Knox Lovell, 2005.
"Productivity at the Post: its Drivers and its Distribution,"
169, Barcelona Graduate School of Economics.
- E. Grifell-Tatjé & C. Lovell, 2008. "Productivity at the post: its drivers and its distribution," Journal of Regulatory Economics, Springer, vol. 33(2), pages 133-158, April.
- E. Grifell-Tatje & C. A. K. Lovell, 2006. "Productivity at the Post: its Drivers and its Distribution," CEPA Working Papers Series WP022006, School of Economics, University of Queensland, Australia.
- Iftekhar Hasan & Ana Lozano, 1999.
"Organizational Form and Expense Preference: Spanish Experience,"
New York University, Leonard N. Stern School Finance Department Working Paper Seires
99-068, New York University, Leonard N. Stern School of Business-.
- Hasan, Iftekhar & Lozano-Vivas, Ana, 2002. "Organizational Form and Expense Preference: Spanish Experience," Bulletin of Economic Research, Wiley Blackwell, vol. 54(2), pages 135-50, April.
- José Á. Z�ñiga-Vicente & José D. Vicente-Lorente, 2006. "Strategic Moves and Organizational Survival in Turbulent Environments: The Case of Spanish Banks (1983-97)," Journal of Management Studies, Wiley Blackwell, vol. 43(3), pages 485-519, 05.
- Tortosa-Ausina, Emili, 2003. "Nontraditional activities and bank efficiency revisited: a distributional analysis for Spanish financial institutions," Journal of Economics and Business, Elsevier, vol. 55(4), pages 371-395.
- Mester, Loretta J., 1991. "Agency costs among savings and loans," Journal of Financial Intermediation, Elsevier, vol. 1(3), pages 257-278, June.
- Cuesta, Rafael A. & Orea, Luis, 2002. "Mergers and technical efficiency in Spanish savings banks: A stochastic distance function approach," Journal of Banking & Finance, Elsevier, vol. 26(12), pages 2231-2247.
- Crespi, Rafel & Garcia-Cestona, Miguel A. & Salas, Vicente, 2004. "Governance mechanisms in Spanish banks. Does ownership matter?," Journal of Banking & Finance, Elsevier, vol. 28(10), pages 2311-2330, October.
- Grifell-Tatje, E. & Lovell, C. A. K., 1996. "Deregulation and productivity decline: The case of Spanish bavings banks," European Economic Review, Elsevier, vol. 40(6), pages 1281-1303, June.
- M.A. Marco Gual & I. Moya Clemente, 1999. "Inefficiency in the Spanish Cooperative Banking Sector," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 70(4), pages 621-637, December.
- Oliver, Alfredo Martin & Fumas, Vicente Salas & Saurina, Jesus, 2006. "Risk premium and market power in credit markets," Economics Letters, Elsevier, vol. 93(3), pages 450-456, December.
When requesting a correction, please mention this item's handle: RePEc:eee:soceps:v:45:y:2011:i:2:p:72-83. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.