Role of off-balance sheet operations on bank scale economies: Evidence from China's banking sector

Xiaohui Hou, Qing Wang and Cheng Li

Emerging Markets Review, 2015, vol. 22, issue C, 140-153

Abstract: This paper investigates product-specific scale economies of banks with respect to off-balance sheet operations. The cost benefits from the non-separability of outputs available to banks that imply the role of OBS activities on bank scale economies are also examined. We further test whether the role of OBS operations on bank scale economies changes across heterogeneous banks. Results suggest that banks can realize more scale economies by increasing OBS operations and that scale economies can be reaped particularly for non-state-owned banks. Therefore, diversification and deregulation should be included in the policy agenda for the subsequent marketization reform of China's banking sector.

Keywords: Off-balance sheet operations; Bank scale economies; Bayesian stochastic frontier; China (search for similar items in EconPapers)
JEL-codes: D24 G21 G28 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1566014114000648
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:22:y:2015:i:c:p:140-153

DOI: 10.1016/j.ememar.2014.10.001

Access Statistics for this article

Emerging Markets Review is currently edited by Jonathan A. Batten

More articles in Emerging Markets Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().