The Importance of Reallocation for Productivity Growth: Evidence from European and US Banking

J. Bos and Peter van Santen ()

No 296, Working Paper Series from Sveriges Riksbank (Central Bank of Sweden)

Abstract: To what extent has input reallocation contributed to aggregate productivity growth in the banking sectors of Europe and the United States? Interestingly, under-performing banks capture market share, while more productive banks lose market share, in particular in the US. The pattern of reallocation is markedly different between the geographical regions: European productivity has grown by reallocating inputs through the first half of the sample period, at the same time when reallocation diminished growth in the US. The long-run positive effects of creative destruction are especially apparent in the US, where reallocation is an important driver of increases in productivity.

Keywords: reallocation; productivity growth; efficiency; banking (search for similar items in EconPapers)
JEL-codes: C24 D24 O30 O47 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2015-02-01
New Economics Papers: this item is included in nep-ban, nep-cse, nep-eff and nep-gro
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http://www.riksbank.se/Documents/Rapporter/Working ... rap_wp296_150226.pdf (application/pdf)

Related works:
Working Paper: The importance of reallocation for productivity growth: Evidence from European and US banking (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:rbnkwp:0296

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