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Bank privatization and productivity

Two Brazilian researchers have examined the recent history of Brazil’s banking industry, evaluating the impact of privatizations and an increasing trend of mergers and foreign entry. Their conclusion:

.. state-owned banks are less productive than private owned ones.… privatization has had a positive impact on productivity. Moreover, the positive effects of privatization seem to take some time to materialize. Privatization proved also to be a superior strategy than restructuring and keeping the bank under state control.

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