Article ID Journal Published Year Pages File Type
5086426 Japan and the World Economy 2008 19 Pages PDF
Abstract
The recent financial deregulation in Japanese banking has enabled regional banks to engage in trust businesses. This paper examines the impact of such nontraditional banking activities on cost structure by measuring economies of scale and scope. A generalized translog cost function, which can take zero outputs into consideration, is employed to simultaneously investigate entrants and non-entrants. While ray scale economies are observed for trust businesses, product-specific scale economies are not. Further, cost complementarities are not observed in almost all the pairwise combinations of the products. Thus, entering into the trust business yields no cost reduction for Japanese regional banks.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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