Revenue management of small securities houses: evidence from Japanese panel data

Kenji Matsui and Junsuke Matsuo

International Journal of Revenue Management, 2008, vol. 2, issue 4, 361-375

Abstract: This paper investigates the revenue management of securities companies by estimating an industry-level frontier production function with the use of unique Japanese financial data. The empirical results suggest several important implications. First, and contrary to a widespread view, operating revenue is negatively influenced by the number of branches of a firm, suggesting that securities firms should not always pursue the strategy of establishing more branches to cover a wider geographical market. Moreover, a higher proportion of brokerage commissions in total revenue are associated with lower production efficiency, implying that securities houses should expand profit-making sources outside their brokerage business.

Keywords: securities business; internet securities brokers; revenue management; frontier productivity function; production efficiency; Japan; small firms; operating revenue; brokerage commissions. (search for similar items in EconPapers)
Date: 2008
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