:: year 10, Issue 31 (Spring 2017) ::
JMBR 2017, 10(31): 29-56 Back to browse issues page
An Evaluation of Economies of Scale and Scope via Cost Function: The Case of Iranian Banking Industry
Farhad Khodadad kash1, Hona sadat Hoseini 2
1- Payame Noor University
Abstract:   (1671 Views)

The purpose of this paper is to evaluate the overall economies of scale, specific economies of scale and economies of scope for Iran's Banking industry. In this order, a Translog Cost function was used. For estimating the model, we use Iran's banking industry data during period 1380-91, the cost function and input-share function. The model is estimated by Seemingly Unrelated Regression (SUR) system. Our findings imply that Iran's Banking industry enjoy relatively small economies of scale. The extent of economies of scale is 0.39. The results also show that the specific economies of scale for both loan and investment is at a low level. The results also indicate that to provide various services Simultaneously leads to economies of scope in Iran’s banking sector.

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Type of Study: Empirical Study | Subject: Monetary Policy, Central Banking, and the Supply of Money and Credit (E5)
Received: 2016/08/1 | Accepted: 2017/12/11 | Published: 2018/01/29

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year 10, Issue 31 (Spring 2017) Back to browse issues page