Economies of Scale and Degree of Capacity Utilization. Evidence from Retail Banks in Argentina
AbstractThe permanent income/transitory income distinction from consumption functions can be applied to cost functions. Transitory deviations of actual output from potential output, i.e. variations in capacity utilization, are relevant for the pattern of U-shaped average costs found in econometric studies. Data from retail banks in Argentina are used to illustrate this issue, with the number of branches as a proxy for potential output, and product per branch as a proxy for the utilization level. Economies of scale at the plant level can be reinterpreted as an indication of excess capacity in the banking industry.
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Bibliographic InfoPaper provided by Universidad del CEMA in its series CEMA Working Papers: Serie Documentos de Trabajo. with number 108.
Date of creation: Feb 1996
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More information through EDIRC
short-run costs; potential output; capacity utilization;
Find related papers by JEL classification:
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- G2 - Financial Economics - - Financial Institutions and Services
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""Reseteo" de un sistema financiero tras una crisis: un análisis de eficiencia
[Resetting a financial system after a crisis: an efficiency analysis]," MPRA Paper 54437, University Library of Munich, Germany.
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