What determines bank productivity? International evidence on the impact of banking competition, bank regulation, and the global financial crisis
Global Banking, Financial Markets and Crises
ISBN: 978-1-78350-170-0, eISBN: 978-1-78350-171-7
Publication date: 24 October 2013
Abstract
This chapter examines the impact of banking competition, bank regulation, and the global financial crisis (GFC) of 2008–2009 on banks’ productivity changes. For the empirical analysis, I apply a semi-parametric two-step approach of Malmquist index estimates and bootstrap regression to a cross-country panel data of 8,451 commercial banks from 82 countries over the period 2004–2012. Empirical results show that (1) banking competition and capital regulation significantly enhance bank productivity, (2) a tighter bank supervision have a positive impact on bank productivity, and (3) bank productivity decreases during the GFC, but starts to increase as the GFC recovers. I also present consistent evidence that commercial banks in countries with better national governance have higher productivity growth before, during and after the GFC.
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Acknowledgements
Acknowledgments
I gratefully acknowledge the financial support from National Science Council (NSC) of Taiwan (NSC-101-2410-H-343-005). I also thank for very helpful comments from Sergio Masciantonio, Dorota Skala, Malgorzata Pawlowska, and participants at the 2013 INFINITI Conference on International Finance (Aix-en-Provence, France) and the 2013 Taiwan Productivity and Efficiency Conference (Taipei).
Citation
Chen, S.-H. (2013), "What determines bank productivity? International evidence on the impact of banking competition, bank regulation, and the global financial crisis", Global Banking, Financial Markets and Crises (International Finance Review, Vol. 14), Emerald Group Publishing Limited, Leeds, pp. 141-171. https://doi.org/10.1108/S1569-3767(2013)0000014009
Publisher
:Emerald Group Publishing Limited
Copyright © 2013 Emerald Group Publishing Limited