Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
964378 | Journal of International Financial Markets, Institutions and Money | 2006 | 21 Pages |
Abstract
The paper examines the technological structure of the Japanese banking sector before the onset of the banking crisis and structural reforms of the 1990s in order to shade light on the logic of the recent trend to consolidation in the industry. While diseconomies of scale are shown to be pervasive in the large banks, defying the rationale for consolidation, the paper presents evidence of an underlying technological progress that operates to significantly increase the industry's efficient minimum size, generating economies at larger banks, thus justifying the ongoing trend in consolidation. The results suggest that, to the extent that consumers can benefit from lower costs of bank production, policies that promote a more concentrated banking structure might be consistent with public interest.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Solomon Tadesse,