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The effects of privatization and consolidation on bank productivity: comparative evidence from Italy and Germany

Elisabetta Fiorentino, Alessio De Vincenzo, Frank Heid, Alexander Karmann and Michael Koetter

No 2009,03, Discussion Paper Series 2: Banking and Financial Studies from Deutsche Bundesbank

Abstract: The Italian and German banking systems shared similar characteristics early in the 1990s but have evolved in different directions since then: Italy privatized its publicly-owned banks while Germany has maintained a large share of state-owned savings banks. Contemporaneously, banks in both markets engaged heavily in mergers and acquisitions. We analyze how these activities have affected banks' productivity in the period 1994-2004, differentiating between technical change, efficiency change and scale economies. We find that privatized banks experienced a significant increase in productivity, especially if they subsequently merged with other banks. German banks were still able to increase their productivity through consolidation.

Keywords: Banking market integration; deregulation; total factor productivity; Italy; Germany (search for similar items in EconPapers)
JEL-codes: D24 G21 G28 L33 (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-ban, nep-eec and nep-eff
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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