Deregulation and Productivity: The Case of Spanish Banks

Subal Kumbhakar and Ana Lozano-Vivas

No E2004/24, Economic Working Papers at Centro de Estudios Andaluces from Centro de Estudios Andaluces

Abstract: This paper deals with measuring total factor productivity (TFP) growth of financial institutions incorporating different types of deregulatory measures. TFP growth is decomposed into external, scale, and markup (in output prices) components. The contribution of the external component is further dissected into several types of deregulation and technical change components. We include the TFP growth relationship as an additional equation in estimating the cost system. The empirical model uses panel data on Spanish banks (savings and commercial), primarily because the Spanish banking sector went through rapid deregulatory changes. We find that deregulations, in general, contributed positively to TFP growth for both savings and commercial banks. Furthermore, domestic (European) deregulations had a greater effect on TFP growth of savings (commercial) banks.

Keywords: Total factor productivity; markup; deregulation; and technical change. (search for similar items in EconPapers)
JEL-codes: D24 D40 G21 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2004
New Economics Papers: this item is included in nep-eff and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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