Fiorentino, Elisabetta Vincenzo, Alessio De Heid, Frank Karmann, Alexander Koetter, Michael
Year of Publication:
Discussion Paper Series 2: Banking and financial studies 2009,03
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.
Banking market integration deregulation total factor productivity Italy Germany