The Effect of Economies of Scope on Iranian Banking Sector Structure: An Application of Multi-Product Function and Multi-Level Effect Approaches | Zendy

Kamran Mahmodpour | Zendy; Mohammad Nabi Shahiki Tash‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬ | Zendy; Mohammad Hassan Fotros | Zendy

Open Access

The Effect of Economies of Scope on Iranian Banking Sector Structure: An Application of Multi-Product Function and Multi-Level Effect Approaches

Author(s) -

Kamran Mahmodpour,

Mohammad Nabi Shahiki Tash‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬,

Mohammad Hassan Fotros

Publication year - 2018

Publication title -

scientific annals of economics and business

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.204

H-Index - 6

eISSN - 2501-3165

pISSN - 2501-1960

DOI - 10.2478/saeb-2018-0016

Subject(s) - monopolistic competition , scope (computer science) , economies of scope , product (mathematics) , variety (cybernetics) , industrial organization , economies of scale , statistic , market structure , economics , business , function (biology) , monetary economics , microeconomics , monopoly , computer science , mathematics , statistics , geometry , artificial intelligence , programming language , evolutionary biology , biology

This paper investigates, using a multi-product paradigm, the market structure of the Iranian banking sector to evaluate the role of scale. In so doing, we checked for economies of scope by multi-product cost function as well as the impact of potential economies on the banking sector structure including 18 banks during the period 2008–2014. The changes in Panzar-Rosse H-Statistic as a result of the variety in products reflect changes in the monopolistic power. The results show that an increase in the variety of offered products increases banks’ monopolistic power.

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