Integration, Productivity and Technological Spillovers: Evidence for Eurozone Banking Industries

40 Pages Posted: 7 Jul 2011 Last revised: 20 Feb 2014

See all articles by Barbara Casu

Barbara Casu

City University London - Sir John Cass Business School

Claudia Girardone

University of Essex - Essex Business School

Alessandra Ferrari

University of Reading - Faculty of Economic and Social Sciences

John O. S. Wilson

University of St. Andrews

Date Written: February 20, 2014

Abstract

In the context of the debate on increased integration of Eurozone banking markets, this paper evaluates the impact of the Single Market on bank productivity and assesses the cross-border benefits of integration in terms of technological spillovers. We utilise a parametric meta-frontier Divisia index to estimate productivity change and identify technological gaps. We then assess the extent to which productivity converges within and across banking industries as a result of technological spillovers. Our results suggest that bank productivity growth has occurred for most Eurozone countries up to the onset of the financial crisis, but has since reversed. Technological spillovers do exist, and have led to progression toward the best technology. However, convergence is not complete and significant long run differences in productivity persist. Improvements in technology are increasingly driven by a smaller number of banks and concentrated in fewer banking industries.

Keywords: European Banking; Financial Integration, Convergence, Productivity Growth

JEL Classification: G21, D24,

Suggested Citation

Casu, Barbara and Girardone, Claudia and Ferrari, Alessandra and Wilson, John O. S., Integration, Productivity and Technological Spillovers: Evidence for Eurozone Banking Industries (February 20, 2014). Available at SSRN: https://ssrn.com/abstract=1879963 or http://dx.doi.org/10.2139/ssrn.1879963

Barbara Casu

City University London - Sir John Cass Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

Claudia Girardone

University of Essex - Essex Business School ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom
+44 1206874156 (Phone)
+44 1206873429 (Fax)

HOME PAGE: http://www.essex.ac.uk/ebs/staff/profile.aspx?ID=1045

Alessandra Ferrari

University of Reading - Faculty of Economic and Social Sciences ( email )

United Kingdom

John O. S. Wilson (Contact Author)

University of St. Andrews ( email )

North St
Saint Andrews, Fife KY16 9AJ
United Kingdom

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