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An analysis of the relevance of off-balance sheet items in explaining productivity change in European banking

Casu, B and Girardone, C (2005) 'An analysis of the relevance of off-balance sheet items in explaining productivity change in European banking.' Applied Financial Economics, 15 (15). 1053 - 1061. ISSN 0960-3107

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Abstract

The 1990s have witnessed a significant growth in bank income generated through non-traditional activities, especially for large EU universal banking institutions. Using the non-parametric Malmquist methodology this study analyses the impact of the inclusion of off-balance sheet (OBS) business in the definition of banks' output when estimating total factor productivity change indexes. Whereas the results reinforce the prevalent view in the recent literature, indicating that the exclusion of non-traditional activities leads to a misspecification of banks' output, the impact of the inclusion of these activities varies. Overall, the inclusion of OBS items results in an increase in estimated productivity levels for all countries under study. However, the impact seems to be the biggest on technological change rather than efficiency change. © 2005 Taylor & Francis.

Item Type: Article
Subjects: H Social Sciences > HG Finance
Divisions: Faculty of Social Sciences > Essex Business School
Faculty of Social Sciences > Essex Business School > Essex Finance Centre
Depositing User: Jim Jamieson
Date Deposited: 13 Jun 2014 13:35
Last Modified: 04 Dec 2017 22:45
URI: http://repository.essex.ac.uk/id/eprint/9697

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