New evidence on returns to scale and product mix among U.S. commercial banks

New evidence on returns to scale and product mix among U.S. commercial banks ¬リニ

This paper presents new estimates of scale and product mix economies for U.S. commercial banks. We compare estimates derived from fitting a translog function to bank costs with estimates derived from nonparametric methods. We refine measures of scale and product mix economies introduced by Berger et al. (J. Monet. Econ. 20 (1987) 501) to accommodate nonparametric estimation, and estimate confid...

Do Large Banks have Lower Costs? New Estimates of Returns to Scale for U.S. Banks

The number of commercial banks in the United States has fallen by more than 50 percent since 1984. This consolidation of the U.S. banking industry and the accompanying large increase in average (and median) bank size have prompted concerns about the effects of consolidation and increasing bank size on market competition and on the number of banks that regulators deem “too–big–to–fail.” Agency p...

Time Value of Commercial Product Returns

Manufacturers and their distributors must cope with an increased flow of returned products from their customers. The value of commercial product returns, which we define as products returned for any reason within 90 days of sale, now exceeds US $100 billion annually in the US. Although the reverse supply chain of returned products represents a sizeable flow of potentially recoverable assets, on...

Do Large Banks have Lower Costs? New Estimates of Returns to Scale for U.S. Banks Appendices A–D

The profit efficiency of small US commercial banks

This study investigates the profit efficiency (PROFEFF) of small banks (those under $500 million in total assets) for 1990–96. Assuming that small banks and large banks use the same production technology, we find, consistent with Berger and Mester [J. Bank. Finance 21 (1997) 875], that small banks are more profit efficient than large banks. Small banks in non-metropolitan statistical areas (non...