Total factor productivity change of Greek cooperative banks

Abstract

Purpose

The purpose of this paper is to investigate the total factor productivity (TFP) change in the Greek cooperative banking industry over the period 2000‐2005.

Design/methodology/approach

The paper employs the Malmquist index and estimate two models, one based on the intermediation approach, and one based on the production approach. TFP change is disaggregated into technical efficiency change and technological change, whereas technical efficiency change is decomposed further into pure technical efficiency change and scale efficiency change.

Findings

The results are mixed. The first model indicates a small decrease (3 per cent) in TFP whereas the second model indicates an increase by 6.6 per cent. Comparing the results on the basis of banks' size finds that TFP growth is higher for smaller banks on average over the entire period of our analysis. However, this relationship between size and productivity is not robust across the years. Furthermore, the differences between the groups are not statistically significant.

Practical implications

The results can be of special interest to several stakeholders such as customers‐members, bank managers, local community, and of course bank regulators.

Originality/value

This paper is believed to be the first that examines the productivity growth of Greek cooperative banks.

Citation

Pasiouras, F. and Sifodaskalakis, E. (2010), "Total factor productivity change of Greek cooperative banks", Managerial Finance, Vol. 36 No. 4, pp. 337-353. https://doi.org/10.1108/03074351011027538