Are some Indian banks too large? An examination of size efficiency in Indian banking
AbstractIn this paper we use data from the years 1997–2003 to evaluate the size efficiency, as distinct from scale efficiency, of Indian banks. Following Maindiratta [Maindiratta A (1990) J Econ 46:39–56] we consider a bank to be “too large” if breaking it up into a number of smaller units would result in a larger output bundle than what could be produced from the same input by a single bank. When this is the case, the bank is not size efficient. Our analysis shows that many of the banks are, indeed, too large in various years. We also find that often a bank is operating in the region of diminishing returns to scale but is not a candidate for break up. Copyright Springer Science+Business Media, LLC 2007
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Bibliographic InfoArticle provided by Springer in its journal Journal of Productivity Analysis.
Volume (Year): 27 (2007)
Issue (Month): 1 (February)
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Web page: http://www.springerlink.com/link.asp?id=100296
Most productive scale size; Scale efficiency; L23; G21;
Other versions of this item:
- Subhash Ray, 2004. "Are Some Indian Bank Too Large? A Examination of Size Efficiency in Indian Banking," Working papers 2004-28, University of Connecticut, Department of Economics.
- L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
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