This paper examines the bank productivity growth and integration process for the 28 EU countries during three main phases of the financial crisis: the U.S. subprime crisis (2007-2008), the global financial crisis (2009-2010) and the sovereign debt crisis (2010-2012). We extend the Malmquist Productivity Index by applying an additive two-stage DEA model. This allows us to explore the sources of growth in different stages of production. Furthermore, we assess the integration of European banks by analyzing the beta-convergence and sigma-convergence of the two-stage Productivity Index. Our results show a productivity growth during the U.S. subprime crisis, but a consistent decline during the global financial crisis. The loss of competitiveness of the European banking system is due to the drop in growth of the performance stage and technical change. Finally, we find a strong convergence pattern during the financial crisis, mainly driven by the catch up process of some Eastern countries and the drop in performance of Western countries.

Bank productivity growth and convergence in the European Union during the financial crisis / M. Degl'Innocenti, S.A. Kourtzidis, Z. Sevic, N.G. Tzeremes. - In: JOURNAL OF BANKING & FINANCE. - ISSN 0378-4266. - 75(2017 Jan), pp. 184-199. [10.1016/j.jbankfin.2016.11.016]

Bank productivity growth and convergence in the European Union during the financial crisis

M. Degl'Innocenti
Primo
;
2017

Abstract

This paper examines the bank productivity growth and integration process for the 28 EU countries during three main phases of the financial crisis: the U.S. subprime crisis (2007-2008), the global financial crisis (2009-2010) and the sovereign debt crisis (2010-2012). We extend the Malmquist Productivity Index by applying an additive two-stage DEA model. This allows us to explore the sources of growth in different stages of production. Furthermore, we assess the integration of European banks by analyzing the beta-convergence and sigma-convergence of the two-stage Productivity Index. Our results show a productivity growth during the U.S. subprime crisis, but a consistent decline during the global financial crisis. The loss of competitiveness of the European banking system is due to the drop in growth of the performance stage and technical change. Finally, we find a strong convergence pattern during the financial crisis, mainly driven by the catch up process of some Eastern countries and the drop in performance of Western countries.
Banking; European Union; Data envelopment analysis; Two-stage; Productivity growth; Convergence
Settore SECS-P/11 - Economia degli Intermediari Finanziari
gen-2017
Article (author)
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/2434/794632
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