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New evidence of scope economies among lending,deposit-taking, loan commitments and mutual fund activities

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Abstract

Financial 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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File URL: http://www.ugr.es/~teoriahe/RePEc/gra/wpaper/thepapers05_01.pdf
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Paper provided by Department of Economic Theory and Economic History of the University of Granada. in its series ThE Papers with number 05/01.

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Length: 31 pages
Date of creation: 10 Jan 2005
Date of revision:
Handle: RePEc:gra:wpaper:05/01

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Keywords: banking; scope economies; off-balance sheet.;

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Cited by:
  1. Harimaya, Kozo, 2008. "Impact of nontraditional activities on scale and scope economies: A case study of Japanese regional banks," Japan and the World Economy, Elsevier, vol. 20(2), pages 175-193, March.
  2. Ignacio Hernando & María J. Nieto, 2006. "Is the internet delivery channel changing banks' performance? The case of Spanish banks," Banco de Espa�a Working Papers 0624, Banco de Espa�a.
  3. Santiago Carbó-Valverde & José Manuel Liñares-Zegarra & Francisco Rodríguez-Fernández, 2007. "Market Power And Willingness To Pay In Network Industries: Evidence From Payment Cards Within Multiproduct Banking," FEG Working Paper Series 07/01, Faculty of Economics and Business (University of Granada).

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