The sources of productivity change in Spanish banking

E. Grifell-Tatjé, C. A.K. Lovell

    Research output: Contribution to journalArticleResearchpeer-review

    129 Citations (Scopus)

    Abstract

    In this paper we examine the pattern of productivity change in Spanish banking over the period 1986-1993. Two sectors dominate Spanish banking, commercial banks and the faster-growing savings banks. We begin by examining productivity change separately within each sector. However since the two sectors are gradually becoming more competitive, we continue by merging the two sectors, and by examining productivity change in the industry. The merging procedure follows a methodology originally proposed by Charnes, Cooper and Rhodes (1981), in which intra-sectoral managerial inefficiency is eliminated prior to merging. This procedure allows us to distinguish differences in managerial efficiency within each sector from differences in the institutional efficiency of the two sectors. It also enables us to decompose potential productivity change into institutional efficiency change, technical change, and the impact of scale economies. We find the commercial banks to have had a slightly lower rate of productivity growth, but a slightly higher rate of potential productivity growth. We attribute this phenomenon to differences in both managerial efficiency and institutional efficiency, to differences in the rate of technical progress, and to the adverse impact of diseconomies of scale in the commercial banking sector. © 1997 Elsevier Science B.V.
    Original languageEnglish
    Pages (from-to)364-380
    JournalEuropean Journal of Operational Research
    Volume98
    DOIs
    Publication statusPublished - 16 Apr 1997

    Keywords

    • Banking
    • Efficiency
    • Malmquist index
    • Productivity

    Fingerprint Dive into the research topics of 'The sources of productivity change in Spanish banking'. Together they form a unique fingerprint.

    Cite this