Economies of scale and scope in the European banking sector

Goisis, Gianandrea; Giorgetti, Maria Letizia; Parravicini, P.; Salsano, Francesco; Tagliabue, Giovanna

doi:10.1007/s12232-009-0073-x

Cited by 7 publications

(5 citation statements)

References 10 publications

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“…We will use this approach as our empirical benchmark model below. Other studies replace zero values with the minimum value of each output within the sample under consideration (Goisis et al, 2009;Rezvanian and Mehdian, 2002) or with a value equal to ten per cent of output at the sample means (Kim, 1987). An alternative solution is to use the Box-Cox transformation on output variables, e.g., the generalized (hybrid) translog function, as suggested by Caves et al (1980).…”

Section: Scale and Scope Economies With A Common Technologymentioning

confidence: 99%

Estimating economies of scale and scope with flexible technology

et al. 2016

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Section: Scale and Scope Economies With A Common Technologymentioning

confidence: 99%

Estimating economies of scale and scope with flexible technology

et al. 2016

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“…Being a European country thus intensifies the positive effect of concentration on GDP per capita (when compared with other countries). This can be associated with scale economies and their behaviour as a cluster, partially explained by their trade agreements (Goisis et al, 2009). In model (4) introduces a dummy for Asian countries (DA = 1 for Asian countries, and 0 otherwise).…”

Section: Import Concentration For a Given Sectormentioning

confidence: 99%

The geographical and sectoral concentration of global supply chains

Jiménez

Dietzenbacher

Duarte

et al. 2022

Spatial Economic Analysis

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Due to international fragmentation, production increasingly occurs in global supply chains (GSC). The common belief is that this leads to more specialization, which implies more concentration of imports and exports over time. In this paper, we empirically test this hypothesis by analysing the geographical and sectoral concentration of GSC over the period 1995-2011. We adapt the traditional Herfindahl's concentration indexes to a multi-regional input-output framework. Taking the information on intersectoral and interregional linkages into full account gives the concentration indexes of GSC. The indexes are at different aggregation levels, which enables us to examine both geographical and sectoral concentration patterns. After that, we analyse the effect a country's geographical and sectoral concentration on its gross domestic product (GDP) per capita. Our findings are: an increase of geographical and sectoral concentration of GSC from 1995 to 2011; a growing role in global production chains played by China and other Asian countries; less concentration for European Union countries; a significant positive effect of geographical concentration on GDP per capita; and a significant negative effect of sectoral concentration.

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“…After the global financial crisis of 2007-09, various regulations were adopted or considered to manage the risky activities for the banking sector (such as separating the risky investment banking business from the less risky commercial banking business), especially for the TBTF banks. Some economists and policymakers (e.g., Fisher, 2011;Fisher & Rosenblum, 2012;Tarullo, 2012;Haldane & Booth, 2014) even proposed to control the bank sizes, although these proposals have not been implemented. Although these regulations after the global financial crisis have greatly enhanced the stability of the banking sector 3 , the size control might bring additional cost burden for the banks and society 4 , if the potential increasing returns to scale (IRS) in cost, revenue, and profit are prevented.…”

Section: Introductionmentioning

confidence: 99%

“…Goisis et al. (2009) find evidence on the cost economies of scale only for smaller banks, but not for larger banks, through using the translog cost functional form for the 282 European banks in 2008. Beccalli et al.…”

Section: Introductionmentioning

confidence: 99%

Returns to scale in cost, revenue, and profit for European banks: New results from nonparametric local linear methods

Wu,

Zhao

2023

The Financial Review

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The continuously increasing bank sizes have received much attention from both policymakers and researchers. We present new estimates of returns to scale in cost, revenue, and profit for European banks over 2000–2020 based on nonparametric, local‐linear methods. We find that most banks faced increasing returns to scale in cost and decreasing returns to scale in revenue and profit across years, across European countries, and across bank size quartiles. Our results suggest that restricting the size of banks may not bring too much loss of revenue and profit, but could prevent European banks from exploiting increasing returns to scale in cost.

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Economies of scale and scope in the European banking sector

Abstract: Bank, Scale economies, Scope economies, G10, G14, G20, G21,

Cited by 7 publications

References 10 publications

Estimating economies of scale and scope with flexible technology

Estimating economies of scale and scope with flexible technology

The geographical and sectoral concentration of global supply chains

Returns to scale in cost, revenue, and profit for European banks: New results from nonparametric local linear methods

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