Open AccessMarket Structure And Banking Production Economies: Evidence From The 1980s Deregulation
Author(s) -
Rasoul Rezvanian,
Nanda Rangan,
Richard Grabowski
Publication year - 2011
Publication title -
journal of applied business research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.149
H-Index - 22
eISSN - 2157-8834
pISSN - 0892-7626
DOI - 10.19030/jabr.v8i3.6143
Subject(s) - deregulation , economies of scope , economies of scale , scope (computer science) , market structure , production (economics) , cost structure , economics , monetary economics , function (biology) , business , market economy , industrial organization , macroeconomics , microeconomics , evolutionary biology , biology , computer science , programming language
This study examines the changes in the cost structure of banking firms using data from pre and post deregulation periods. A translog cost function is utilized for the analyses of economies of scale and scope. The results indicate that the average cost curves, although U-shaped flattened over time, resulting in an increase in optimal bank size. Economies of scope that existed prior to deregulation appears to be exhausted in a more nonconstrained environment.