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Regulations and productivity growth in banking

Author

Listed:
  • Delis, Manthos D
  • Molyneux, Philip
  • Pasiouras, Fotios
Abstract
This paper examines the relationship between the regulatory and supervision framework and the productivity of banks in 22 countries over the period 1999-2006. We follow a semi-parametric two-step approach that combines Malmquist index estimates with bootstrap regressions. The results indicate that regulations and incentives that promote private monitoring have a positive impact on productivity. Restrictions on banks’ activities relating to their involvement in securities, insurance, real estate and ownership of non-financial firms also have a positive impact. However, regulations relating to the first and second pillars of Basel II, namely capital requirements and official supervisory power do not appear to have a statistically significant impact on productivity.

Suggested Citation

  • Delis, Manthos D & Molyneux, Philip & Pasiouras, Fotios, 2009. "Regulations and productivity growth in banking," MPRA Paper 13891, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:13891
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    References listed on IDEAS

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    2. Sara G.Castellanos & Jesus G. Garza-Garcia, 2013. "Competition and Efficiency in the Mexican Banking Sector," Working Papers 1329, BBVA Bank, Economic Research Department.
    3. Sok-Gee Chan & Mohd Zaini Abd Karim, 2016. "Financial market regulation, country governance, and bank efficiency: Evidence from East Asian countries," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 10(1), March.

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    More about this item

    Keywords

    Banks; Basel II; Productivity; Regulations;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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