Are Some Indian Bank Too Large? A Examination of Size Efficiency in Indian Banking
AbstractIn this paper we use data from the years 1997 through 2003 to evaluate the size efficiency of Indian banks. Following Maindiratta (1990) we consider a bank to be too large if breaking it up into a number of smaller units would result in a larger output bundle than what could be produced from the same input by a single bank. When this is the case, the bank is not size efficient. Our analysis shows that many of the banks are, in deed, too large in various years. We also find that often a bank is operating in the region of diminishing returns to scale but is not a candidate for break up.
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Bibliographic InfoPaper provided by University of Connecticut, Department of Economics in its series Working papers with number 2004-28.
Length: 31 pages
Date of creation: Sep 2004
Date of revision:
Note: The author thanks Abhiman Das of Reserve Bank of India for providing the data.
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Other versions of this item:
- Subhash Ray, 2007. "Are some Indian banks too large? An examination of size efficiency in Indian banking," Journal of Productivity Analysis, Springer, vol. 27(1), pages 41-56, February.
- L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-10-21 (All new papers)
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