Total Factor Productivity Change of Greek Cooperative Banks

In this study, we employ the Malmquist index to examine the total factor productivity change in the Greek cooperative banking, using a balanced panel dataset of 78 observations from 13 banks over the period 2000-2005. We estimate two models, one based on the intermediation approach, and one based on the production approach. The results are mixed. The first model indicates a small decrease (3%) in total factor productivity whereas the second model indicates an increase by 6.6%. We also compare the results on the basis of banks' size and find that TFP growth is higher for smaller banks on average over the entire period of our analysis. However, this relationship between size and productivity is not robust across the years. Furthermore, the differences between the groups are not statistically significant