Bank Productivity Change and Off-Balance-Sheet Activities Across Different Levels of Economic Development

This study analyses the impact of OBS on banking productivity growth using a sample of 712 banks from 84 countries between 1999 and 2006. Our international setting allows us to analyse differences on the performance on banking institutions among various groups of countries with different economic and financial innovations development. We estimate cost and profit productivity growth using a parametric approach that decomposes the change in risk-adjusted cost and profit performance into two main components: changes in business conditions and changes in productivity. The latter one is decomposed further into the change in best practice and change in (in)efficiency. Copyright Springer Science+Business Media New York 2014