New evidence of scope economies among lending,deposit-taking, loan commitments and mutual fund activities
AbstractFinancial innovation and technology affect bank cost, revenue and profits. Most of the previous empirical studies have not found significant cost, profit or revenue scope economies or output pair complementarities either between traditional and non-traditional banking products or between traditional activities themselves. We study scope economies and output pair 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 rise and are statistically significant. 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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Bibliographic InfoPaper provided by Department of Economic Theory and Economic History of the University of Granada. in its series ThE Papers with number 05/01.
Length: 31 pages
Date of creation: 10 Jan 2005
Date of revision:
banking; scope economies; off-balance sheet.;
Other versions of this item:
- Carbo Valverde, Santiago & Fernandez, Francisco Rodriguez, 2005. "New evidence of scope economies among lending, deposit-taking, loan commitments and mutual fund activities," Journal of Economics and Business, Elsevier, vol. 57(3), pages 187-207.
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-05-29 (All new papers)
- NEP-EFF-2005-05-29 (Efficiency & Productivity)
- NEP-FIN-2005-05-29 (Finance)
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