Assessing Output And Productivity Growth In The Banking Industry

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 aggregation and estimation of output and inputs and the estimation of productivity (partial and total factor) the authors relied on the index number method (Tornqvist index). Additionally, they considered the effect of labor quality on banks' productivity and using a growth accounting framework they examined the contribution of Total Factor Productivity (TFP) to bank output growth. The results show that bank output and labor productivity increased considerably during the period under examination, outpacing the respective GDP growth and labor productivity of the Greek economy.