The importance of market dynamics along the extensive margin for productivity growth has been shown for the United States (Foster, Haltiwanger, and Krizan 2001) and, more recently, China (Brandt, Van Biesebroeck, and Zhang 2012). Yet, the contribution of entry and exit to productivity growth is mainly observable in high growth episodes.
5 Structural changes in the banking sector are likewise reflected in adjustment along the extensive margin. Overall, the number of banks has been shrinking in most countries. This downward trend is also due to a decrease in number of new banks.