Bank privatization and productivity

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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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