Total factor productivity growth in banking: The Israeli banking sector 1979-1982

Moshe Kim, Jacob Weiss

Research output: Contribution to journalArticlepeer-review


The primary focus of this paper is the modeling and estimation of total factor productivity growth in banking. The measured total factor productivity growth is decomposed into its main components: 1) scale economy and output growth, 2) branching effect, and 3) technological change effect. Our findings indicate that total factor productivity grew at an annual average rate of 7.8% for the 1979-1982 period but this growth has slowed down to only 2.9% for the 1981-1982 period. Scale economy and output growth have contributed to about four-fifths of the growth, whereas branch growth and technical change have contributed to one-fifth of the growth. An important observation is the increasing importance of both branch growth and technical change throughout the period, especially for smaller banks.

Original languageEnglish
Pages (from-to)139-153
Number of pages15
JournalJournal of Productivity Analysis
Issue number2
StatePublished - Jun 1989

ASJC Scopus subject areas

  • Business and International Management
  • Social Sciences (miscellaneous)
  • Economics and Econometrics


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