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Sources of Productivity Gains in Indian Banking Industry: Is It Efficiency Improvement or Technological Progress?

Sunil Kumar and Rachita Gulati ()
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Sunil Kumar: South Asian University

Chapter Chapter 7 in Deregulation and Efficiency of Indian Banks, 2014, pp 237-264 from Springer

Abstract: Abstract The main focus of present chapter is to look at the impact of financial deregulation programme launched in the year 1992 on the productivity performance of Indian banks. The empirical results indicate that total factor productivity in Indian banking industry followed an uptrend during the post-deregulation period, albeit trend was modest. Further, the observed productivity growth was almost entirely attributable to technological progress. While the public sector banks made steadier progress in productivity, the de novo private banks outperformed their peers. The empirical findings also reflect the enormous relevance of foreign ownership in Indian banking industry since foreign banks have emerged as the leading technological innovators in the banking system. In addition, exposure to off-balance activities has been noted as the most significant factor in explaining the observed inter-bank variations in the total factor productivity growth.

Keywords: Productivity Growth; Total Factor Productivity; Total Factor Productivity Growth; Private Bank; Foreign Bank (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1007/978-81-322-1545-5_7

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