Economies of scale and scope in French commercial banking industry

This paper presents estimations of economies of scale and scope in the French banking industry. Using a translog model of bank costs, the paper demonstrates the existence of economies of scale for French banks, particularly in what concerns operating costs. Economies of scale are observed in all classes of bank size. Results also suggest that cost subadditivity exists in the French banking industry.     

Economies of scale and organization efficiency in banking

Previous studies attempting to assess economies of scale in banking firms have largely relied upon cost functions. The profit-function approach enjoys several important advantages over the cost-function method, consequently that is the approach used in this study. A risk-adjusted profit function estimates economies of scale of unit and branch banks; and the effects of bank holding-company affiliation on the level of bank profits is also examined. The results indicate larger economies of scale for branch banks than for unit banks; and bank holding-company affiliates were found to be more efficient than independent banks.     

Economies of scale and scope in water supply

This study examines the multiproduct nature of water supply relative to economies of scale and scope. The water utility is viewed as a multiproduct firm providing residential and non- residential services with spatial variation. There are no significant economies of scale in the utility's overall operation. The utility, however, enjoys considerable economies for non- residential water supply but suffers from diseconomies in residential supply. The economies of scale achieved in water treatment are mostly lost in the distribution of water. The utility on the whole experiences economies of scope associated with joint production of the two services. Furthermore, water utilities have no perceptible tendency to behave as a natural monopoly.     

Economies of scope and economies of agglomeration

Agglomeration economies are economies external to the firm, and plant, but internal to a particular location. In this paper the notion of agglomeration economies is formally investigated. The implications of the concept for urban structure and industrial organization are then traced. Under specified considerations, weak economies of agglomeration, as defined in this paper, are shown to be necessary for the existence of an urban area.     

Economies of scale in advertising

In this article a flexible quadratic model is used to generate sales elasticity estimates for own advertising, competitor advertising and media concentration. On the basis of these estimates, moderate and declining economies of scale in advertising are indicated for firms at the highest end of the advertising per firm distribution. No advertising economies, however, are obvious for the levels of advertising common across the broad spectrum of US industry. Thus, any competitive harm due to economies of scale in advertising would seem quite minor.     

Economies of scale in networks

A network's capacity can typically be increased in a variety of ways. For example, in a highway network, existing roads can be made wider or new roads added. This paper is concerned with the determination of the degree of local economies of scale in the cost function for the outputs of a congestible network when there are multiple margins for making adjustments to capacity. The main result is that under the provision of a cost-minimizing network—one for which the sum of user and capacity costs for the network's outputs is at a minimum—the degree of local economies of scale in the cost function for the network's outputs is the same along all margins for adjusting capacity. This includes what routes to establish.     

Economies of scale and market power in policing

The objective of this paper is to use a simultaneous equations method for estimating police production and demand to determine whether or not there are economies of scale in policing. In addition, the effect of market power on productivity, using the Herfindahl–Hirschmann Index, is to be measured. The estimation yields the result that there are diseconomies of scale with respect to the amount of crime beyond about 22 000 people in the policing jurisdiction and diseconomies of scale in numbers of police beyond about 36 000 people. Efficiency is also reduced where there is greater market power. This is conjectured to be the public sector equivalent of taking market power profits. Copyright © 2005 John Wiley & Sons, Ltd.     

Economies of scale and density in local telephone networks

The production structure of local telephone networks is analyzed with a translog cost function estimated with cross-sectional data on a sample of 44 small local exchange companies (LECs). The output vector includes the number of stations served and the service territory area. Economies of scale are exhausted beyond 992 stations with growth through territorial expansion. The threshold for expansion through densification is 51,053 stations. These results suggest that the optimal LEC's size is small, and that competition may be the most efficient form of production organization for medium to large markets in rural and low-density urban settings.     

Economies of scale in the Mexican automotive sector

Recent growth of the Mexican motor vehicle industry has sparked a great deal of controversy on both sides of the U.S.-Mexico border regarding the potential effects of the North American Free Trade Agreement. One of the key factors affecting the future competitiveness of the Mexican motor vehicle industry relative to U.S. producers is whether the Mexican firms can exploit economies of scale as their output expands. This article investigates that possibility as well as the direct and cross-price elasticities of demand for the inputs by estimating translog cost functions for the Mexican motor vehicle and autoparts industries. The results are consistent with the hypotheses that substantial economies of scale remain to be exploited by the Mexican motor vehicle industry, but that the autoparts industry is operating with diseconomies of scale. However, the lack of investment in new technology and X-inefficiency on the part of the autoparts firms may have been partially responsible for the latter finding.     

The evolution of scale economies in US banking

Continued consolidation of the US banking industry and a general increase in the size of banks have prompted some policymakers to consider policies that discourage banks from getting larger, including explicit caps on bank size. However, limits on the size of banks could entail economic costs if they prevent banks from achieving economies of scale. This paper presents new estimates of returns to scale for US banks based on nonparametric, local‐linear estimation of bank cost, revenue, and profit functions. We report estimates for both 2006 and 2015 to compare returns to scale some 7 years after the financial crisis and 5 years after enactment of the Dodd–Frank Act with returns to scale before the crisis. We find that a high percentage of banks faced increasing returns to scale in cost in both years, including most of the 10 largest bank holding companies. Also, while returns to scale in revenue and profit vary more across banks, we find evidence that the largest four banks operate under increasing returns to scale.     

Form of ownership and risk taking in banking: Some evidence from Massachusetts savings banks

In recent years there has been interest in the impact of the form of ownership on the behavior of financial institutions. In the 1980’s, there was a substantial movement away from mutual ownership to stock ownership in the thrift industry. The effect of this conversion process on risk taking and efficiency has been a matter of concern. The purpose of this paper is to examine the experience of savings banks in Massachusetts. A panel of 115 savings banks is analyzed for the years 1985 through 1993, a period that includes both rapid growth and a subsequent severe cyclical decline in property values. The credit quality of loan portfolios is related to the size of the portfolio, the structure of the portfolio, and the ownership status of the bank. Several models are estimated. In all cases, it was found that the cyclical decline in property values resulted in a decline in the credit quality of loan portfolios with a substantially greater impact on those savings banks that converted from mutual to stock status.     

Economies of scale in steam-electric power generation in East-North-Central U.S.

In this study the author investigates firm-level cross-sectional unit cost advantages for electricity generation for 31 regulated private steam-electric utilities in East-North-Central U.S. region during 1987. The production technology is modeled using the implied dual minimum total variable cost translog methodology. Estimates of Zellner’s Seemingly Unrelated Regressions indicate a smooth non-homothetic technology, a typical regional firm-level scale economies of about 0.263, and an implied mean cost-output elasticity of about 0.737. Significant scale economies exist for several of the smaller utilities. The findings support policies which steer energy-intensive industrial location decisions in a direction which captures unutilized unit cost economies in electricity generation.     

The temporal behavior of scale economies within A banking firm

Examining the time path of the scale economies has not received much attention until recently. Moreover, the time path of scale economies for a given firm has not been studied in the banking literature at all. Examining scale economies, either from cross-sectional or panel data, based only on a single estimate ignores the dynamic behavior (both cost- and production-wise) of a banking firm as well as of the banking industry. We study the time-varying scale economies of commercial banking firms. We employ the Kalman-filter approach in estimating the translog cost function. The Kalman filter allows the parameters of the translog cost function and therefore the scale economies to be time dependent and varying. The estimation results indicate significant variation in inter- and within-firm scale economies over time for sample banks.     

Economies of scale for a state system of public school districts

A review of the different variables, school district samples, regression techniques and a priori assumptions utilized in recent studies clearly indicates that no standard model or set of procedures have been developed for the problems of economies of scale within the educational sector. Based on these studies and a brief discussion of the limitations of economies of scale models as a tool in policy planning, we present a generalizable model that can easily be applied to statistics now available in state departments of education to derive valuable new information about the existing cost-size relationships and opportunity costs that exist in a state system of public school districts. A recent application of the model in Oregon that illustrates its generalizability is described. An example of how economies of scale information might be used in policy planning and proposed district consolidations is also outlined.     

新疆影子银行业务规模和资金流向及其风险防范对策

文章在调研的基础上,针对新疆影子银行业务的规模和结构进行分析,总结其资金流向及其蕴含的风险,并在文后提出规范法律体系、纳入监管范围等防范风险的对策。     

Internationalization of Chinese banking and financial institutions: a fuzzy-set analysis of the leader-TMT dynamics

Abstract

Received international business and international human resource management theories have generally reached a consensus on the important role of leader and top management teams (TMTs) in deciding and shaping the firm’s internationalization process. However, what remains unclear is how a well-functioning TMT is formed to effectively achieve the desired internationalization goal. Utilizing a unique sample of Chinese banking and finance institutions’ initial public offering overseas, this study explores how Chinese BFIs configure the leader-TMT dynamics to achieve high internationalization performance. Using a set-theoretic approach and the technique of fuzzy-set qualitative comparative analysis, a distinct taxonomy of the leader-TMT dynamics (namely, grass-root, strategic executor, born-global and glocal) is developed. Our findings provide novel insights into the IHRM variations within Chinese BFIs’ TMT formation, based on a theoretically and methodologically extended leader-TMT dynamics perspective.     

中国银行业的规模经济和范围经济--基于广义超越对数成本函数的检验

本文利用广义超越对数成本函数估计了我国国有商业银行及股份制商业银行1994—2001年的成本函数，并计算出各自的规模经济和范围经济。结果表明：国有商业银行存在规模经济而股份制商业银行存在轻微的规模不经济；国有商业银行在其传统业务(存款、贷款)上具有规模经济，在投资上具有规模不经济，股份制商业银行则相反；国有商业银行及股份制商业银行都存在总体范围经济；国有商业银行在贷款和存款上的范围经济大于在投资上的范围经济，股份制商业银行在贷款上不具有范围经济，而在投资和存款上具有显著的范围经济；国有商业银行和股份制商业银行在贷款和投资组合上都不具有成本互补性，而在贷款和存款及存款和投资组合上都具有轻微的成本互补性。针对上述检验结果，提出了相应的政策建议。     

Economies of scale after deregulation in LTL trucking: a test case for the survivor technique

Early critics of motor carrier deregulation believed that the policy was unwise because strong economies of scale would lead to harmful market concentration, particularly in the industry's LTL segment. Using two methodologies, the survivor technique and the trans‐log cost function, this study finds that economies of scale do extend across the entire spectrum of firm sizes in LTL trucking. Long‐run average cost appears to decline mildly and at a diminishing rate with increases in firm size, however, such that any cost advantage for larger firms has been insufficient to eliminate new entry and competition from smaller rivals. As a result, after the first 20 years of deregulation, the corresponding increase in market concentration has also been mild. Moreover, the consistency of results from the two methodologies gives credibility to the survivor technique as an empirical method of identifying economies of scale. Copyright © 2008 John Wiley & Sons, Ltd.