Assessing Output and Productivity Growth in the Banking Industry

Posted: 30 Oct 2012

See all articles by Panayiotis P. Athanasoglou

Panayiotis P. Athanasoglou

Evaggelia Georgiou

Bank of Greece

Christos Staikouras

Athens University of Economics and Business - Department of Accounting and Finance

Date Written: August 18, 2009

Abstract

This paper assesses the evolution of output and productivity in the Greek banking industry for the period 1990-2006. Three main categories of bank output were estimated based on modern theoretical approaches, while for the estimation of output and productivity (partial and total factor) we relied on the index number method (Tornqvist index). We also considered the effect of labor quality on banks' productivity and the contribution of total factor productivity to bank output growth. Bank output and labor productivity outpaced considerably the respective GDP growth and labor productivity of the Greek economy during the period under examination. Capital and total factor productivity have also improved remarkably mainly since 1999, due to the structural changes that took place within the industry, capital (mainly IT) investments and improvement in the quality of human capital.

Keywords: Bank output, Total factor productivity, User-cost approach, Labor quality, Tornqvist index

JEL Classification: D24, G21, J24, O47

Suggested Citation

Athanasoglou, Panayiotis P. and Georgiou, Evaggelia and Staikouras, Christos, Assessing Output and Productivity Growth in the Banking Industry (August 18, 2009). Quarterly Review of Economics and Finance, Vol. 49, No. 4, 2009. Available at SSRN: https://ssrn.com/abstract=2168367

Evaggelia Georgiou

Bank of Greece

21 E. Venizelos Avenue
GR-10250 Athens
Greece

Christos Staikouras

Athens University of Economics and Business - Department of Accounting and Finance ( email )

76 Patission Street
Athens, 104 34
Greece
+30 210 8203 459 (Phone)

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