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Scope Economies and Competition Beyond the Balance Sheet: a ‘broad banking’ Experience

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Author Info
Santiago Carbó Valverde () (Universidad de Granada)
Francisco Rodríguez Fernández () (Universidad de Granada)

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Abstract

There is a recent trend in banking research aiming to assess how financial innovation and technology are affecting bank cost, revenue and profits. Most of the studies have not found significant cost, profit or revenue complementarities either between traditional and non-traditional banking products or between traditional activities themselves. We study complementarities in a ‘broad banking’ environment: the Spanish banking sector. The results indicate that after including off-balance sheet business in the output mix, cost and profit scope economies increase significantly. Besides, consumer valuation of financial services is only detected when the off-balance sheet business is added to the output definition.

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Publisher Info
Paper provided by Centro de Estudios Andaluces in its series Economic Working Papers at Centro de Estudios Andaluces with number E2004/13.

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Length: 52 pages
Date of creation: 2004
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Handle: RePEc:cea:doctra:e2004_13

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Related research
Keywords: banking; cost; profit; scope economies; off-balance sheet.;

Find related papers by JEL classification:
G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Mortgages
L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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