An Evaluation of Economies of Scale and Scope via Cost Function: The Case of Iranian Banking Industry (in Persian)

Farhad Khodadad kash () and Hona Sadat Hoseini ()
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Farhad Khodadad kash: Payame Noor University
Hona Sadat Hoseini: Iran

Journal of Monetary and Banking Research (فصلنامه پژوهش‌های پولی-بانکی), 2017, vol. 10, issue 31, 29-56

Abstract: The purpose of this paper is to evaluate the overall economies of scale, specific economies of scale and economies of scope for Iranchr('39')s Banking industry. In this order, a Translog Cost function was used. For estimating the model, we use Iranchr('39')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 Iranchr('39')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.

JEL-codes: D24 G21 L11 (search for similar items in EconPapers)
Date: 2017
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