The Productivity of European Co‐operative Banks

Abstract

This paper examines the cost and profit productivity of European co‐operative banks between 1996 and 2003 using the parametric productivity decomposition suggested by Berger and Mester (2003). We find that over the period co‐operative banks benefited from substantial gains in both profit and cost productivity. Annual profit improvements range between 4% and 8% for the majority of co‐operative banks, with even larger cost productivity gains. These productivity improvements have predominantly been generated by the enhanced performance of best practice banks relative to other banks. This means that the best practice co‐operative banks have moved further away from other banks in terms of increasing profits and reducing costs.

Citation

Molyneux, P. and Williams, J. (2005), "The Productivity of European Co‐operative Banks", Managerial Finance, Vol. 31 No. 11, pp. 26-35. https://doi.org/10.1108/03074350510769947