Financial deregulation and productivity growth in banking sector: empirical evidence from Bangladesh
This article examines the effects of regulatory reform on productivity growth in the Bangladesh banking industry. We use a unique balanced panel dataset comprising bank-level annual data from the early deregulation year (1984) to the most recent available period (2012) from major commercial banks in...
| Main Authors: | , , |
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| Format: | Journal Article |
| Published: |
Taylor & Francis
2019
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| Online Access: | http://hdl.handle.net/20.500.11937/75508 |
| _version_ | 1848763495812694016 |
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| author | Iftekhar, R. Salim, Ruhul Bloch, Harry |
| author_facet | Iftekhar, R. Salim, Ruhul Bloch, Harry |
| author_sort | Iftekhar, R. |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | This article examines the effects of regulatory reform on productivity growth in the Bangladesh banking industry. We use a unique balanced panel dataset comprising bank-level annual data from the early deregulation year (1984) to the most recent available period (2012) from major commercial banks in Bangladesh. Applying the Färe-Primont index, the paper provides estimates of productivity growth and identifies sources of total factor productivity (TFP) change. Empirical results show the sample banks have experienced positive TFP change after the financial deregulation. On average, TFP growth is higher in private banks than their public sector counterparts in the post-reform period. In addition, the decomposition analysis shows technological progress is the main driver of productivity change. Similar results are obtained by using the stochastic frontier analysis (SFA). Thus, empirical results remain robust irrespective of the methodology used. The regression analysis finds a positive technical change in the first stage of the reform program, i.e. during the transition period, as leading banks employ advanced technology to compete with potential new entrants. The result also shows that the banking industry still remains concentrated within the state-owned banks. |
| first_indexed | 2025-11-14T11:04:22Z |
| format | Journal Article |
| id | curtin-20.500.11937-75508 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T11:04:22Z |
| publishDate | 2019 |
| publisher | Taylor & Francis |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-755082020-11-02T01:13:33Z Financial deregulation and productivity growth in banking sector: empirical evidence from Bangladesh Iftekhar, R. Salim, Ruhul Bloch, Harry This article examines the effects of regulatory reform on productivity growth in the Bangladesh banking industry. We use a unique balanced panel dataset comprising bank-level annual data from the early deregulation year (1984) to the most recent available period (2012) from major commercial banks in Bangladesh. Applying the Färe-Primont index, the paper provides estimates of productivity growth and identifies sources of total factor productivity (TFP) change. Empirical results show the sample banks have experienced positive TFP change after the financial deregulation. On average, TFP growth is higher in private banks than their public sector counterparts in the post-reform period. In addition, the decomposition analysis shows technological progress is the main driver of productivity change. Similar results are obtained by using the stochastic frontier analysis (SFA). Thus, empirical results remain robust irrespective of the methodology used. The regression analysis finds a positive technical change in the first stage of the reform program, i.e. during the transition period, as leading banks employ advanced technology to compete with potential new entrants. The result also shows that the banking industry still remains concentrated within the state-owned banks. 2019 Journal Article http://hdl.handle.net/20.500.11937/75508 10.1080/00036846.2019.1607244 Taylor & Francis fulltext |
| spellingShingle | Iftekhar, R. Salim, Ruhul Bloch, Harry Financial deregulation and productivity growth in banking sector: empirical evidence from Bangladesh |
| title | Financial deregulation and productivity growth in banking sector: empirical evidence from Bangladesh |
| title_full | Financial deregulation and productivity growth in banking sector: empirical evidence from Bangladesh |
| title_fullStr | Financial deregulation and productivity growth in banking sector: empirical evidence from Bangladesh |
| title_full_unstemmed | Financial deregulation and productivity growth in banking sector: empirical evidence from Bangladesh |
| title_short | Financial deregulation and productivity growth in banking sector: empirical evidence from Bangladesh |
| title_sort | financial deregulation and productivity growth in banking sector: empirical evidence from bangladesh |
| url | http://hdl.handle.net/20.500.11937/75508 |