Banking Costs, Generalized Functional Forms, and Estimation of Economies of Scale and Scope
AbstractRecently, researchers have claimed that the primitive Cobb-Douglas production technology captures banking cost functions adequately. These findings rule out scope economies and U-shaped cost curves. The rejection of the generalized flexible form postulated by the above authors is a necessary, but not a sufficient, condition to justify a Cobb-Douglas specification. Using restricted generalized functional forms, the authors find that the composite output Cobb-Douglas specification is an inadequate description of banking cost technology. Translog specifications with multiple products capture the data best, suggesting the presence of both scope and scale economies. Copyright 1989 by Ohio State University Press.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Blackwell Publishing in its journal Journal of Money, Credit and Banking.
Volume (Year): 21 (1989)
Issue (Month): 3 (August)
Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-2879
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Toivanen, Otto, 1997. "Economies of scale and scope in the Finnish non-life insurance industry," Journal of Banking & Finance, Elsevier, vol. 21(6), pages 759-779, June.
- David B. Humphrey, 1990. "Why do estimates of bank scale economies differ?," Economic Review, Federal Reserve Bank of Richmond, issue Sep, pages 38-50.
- Jun Du & Sourafel Girma, 2011. "Cost economies, efficiency and productivity growth in the Chinese banking industry: evidence from a quarterly panel dataset," Empirical Economics, Springer, vol. 41(1), pages 199-226, August.
- Tiffany Hutcheson & Ian Sharpe, 1997.
"Ownership Structure and Building Society Efficiency,"
Working Paper Series
78, Finance Discipline Group, UTS Business School, University of Technology, Sydney.
- Tiffany Hutcheson & Ian G. Sharpe, 1998. "Ownership Structure and Building Society Efficiency," Australian Journal of Management, Australian School of Business, vol. 23(2), pages 151-168, December.
- Danny Leung & Terence Yuen, 2007.
"Labour Market Adjustments to Exchange Rate Fluctuations: Evidence from Canadian Manufacturing Industries,"
Open Economies Review,
Springer, vol. 18(2), pages 177-189, April.
- Danny Leung & Terence Yuen, 2005. "Labour Market Adjustments to Exchange Rate Fluctuations: Evidence from Canadian Manufacturing Industries," Working Papers 05-14, Bank of Canada.
- Stephen M. Miller & Terrence M. Clauretie & Thomas M. Springer, 2006.
"Economies Of Scale And Cost Efficiencies: A Panel-Data Stochastic-Frontier Analysis Of Real Estate Investment Trusts,"
University of Manchester, vol. 74(4), pages 483-499, 07.
- Stephen M. Miller & Terrence M. Clauretie & Thomas M. Springer, 2005. "Economies of Scale and Cost Efficiencies: A Panel-Data Stochastic-Frontier Analysis of Real Estate Investment Trusts," Working papers 2005-21, University of Connecticut, Department of Economics.
- Jason Allen & Ying Liu, 2007.
"Efficiency and economies of scale of large Canadian banks,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 40(1), pages 225-244, February.
- Jason Allen & Ying Liu, 2005. "Efficiency and Economies of Scale of Large Canadian Banks," Working Papers 05-13, Bank of Canada.
- Helmers, Glenn A. & Shaik, Saleem & Atwood, Joseph A., 2003. "Social And Scale Efficiency Gains Due To Vertical Integration In The U.S. Hog Sector," 2003 Annual Meeting, February 1-5, 2003, Mobile, Alabama 35143, Southern Agricultural Economics Association.
- Stephen M. Miller & Thomas M. Springer, 2007. "Cost Improvements, Returns to Scale, and Cost Inefficiencies for Real Estate Investment Trusts," Working papers 2007-05, University of Connecticut, Department of Economics.
- Noha Farrag & Guenter Lang, 2012. "The Egyptian Banking Sector: Assessing Efficiency Using a Stochastic Frontier Cost Function," Working Papers 33, The German University in Cairo, Faculty of Management Technology.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.