The Effects of Privatization and Consolidation on Bank Productivity: Comparative Evidence from Italy and Germany

44 Pages Posted: 8 Jun 2016

See all articles by Elisabetta Fiorentino

Elisabetta Fiorentino

Dresden University of Technology

Alessio De Vincenzo

Bank of Italy

Frank Heid

Deutsche Bundesbank

Alexander Karmann

Technische Universitaet Dresden

Michael Koetter

Halle Institute for Economic Research

Multiple version iconThere are 2 versions of this paper

Date Written: 2009

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

JEL Classification: D24, G21, G28, L33

Suggested Citation

Fiorentino, Elisabetta and De Vincenzo, Alessio and Heid, Frank and Karmann, Alexander and Koetter, Michael, The Effects of Privatization and Consolidation on Bank Productivity: Comparative Evidence from Italy and Germany (2009). Bundesbank Series 2 Discussion Paper No. 2009,03. Available at SSRN: https://ssrn.com/abstract=2794026

Elisabetta Fiorentino (Contact Author)

Dresden University of Technology ( email )

Einsteinstrasse 3
Dresden, 01062
Germany

Alessio De Vincenzo

Bank of Italy ( email )

Via Nazionale, 187
00184 Roma
Italy
+39-06-47924446 (Phone)

Frank Heid

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
Germany

Alexander Karmann

Technische Universitaet Dresden ( email )

Muenchner Platz 1- 3
Dresden, 01069
Germany

Michael Koetter

Halle Institute for Economic Research ( email )

P.O. Box 11 03 61
Kleine Maerkerstrasse 8
D-06017 Halle, 06108
Germany

HOME PAGE: http://www.iwh-halle.de/en/about-the-iwh/people/detail/michael-koetter/

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