Ownership, diversification and cost advantages: Evidence from the Italian leasing industry

► Greene's (2005) random parameter cost frontier model and a unique hand-collected dataset. ► Cost advantages of Italian leasing companies over 2002-2008 focusing on ownership structures and diversification strategies. ► Bank-related, independent and domestic leasing companies are more able to control costs than their captive and foreign counterparts. ► Diversification strategies are relevant in determining the cost effectiveness of leasing firms. ► Independent and less diversified leasing firms appear to benefit from higher economies of scale and greater technological advancements.