Regulatory Reform and Productivity Change in Indian Banking

Barbara Casu, Alessandra Ferrari and Tianshu Zhao
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Alessandra Ferrari: University of Reading
Tianshu Zhao: Stirling University

The Review of Economics and Statistics, 2013, vol. 95, issue 3, 1066-1077

Abstract: This paper examines the impact of regulatory reform on productivity growth and its components for Indian banks from 1992 to 2009. We estimate parametric and nonparametric efficiency frontiers, followed by Divisia and Malmquist indexes of total factor productivity, respectively. To account for technology heterogeneity among ownership types, we use a metafrontier approach. Results are consistent across methodologies and show sustained productivity growth, driven mainly by technological progress. Furthermore, results indicate that different ownership types react differently to changes in the operating environment. The position of foreign banks becomes increasingly dominant, and their production technology becomes the best practice in the industry. © 2013 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Keywords: deregulation; productivity change; ownership; DEA; SFA; metafrontier (search for similar items in EconPapers)
JEL-codes: C16 C23 D24 G21 G28 G32 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (65)

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