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Economies Of Scale And Scope Of Economic Studies Of China's Banking Sector

Posted on:2005-10-21Degree:DoctorType:Dissertation
Country:ChinaCandidate:Z H LiuFull Text:PDF
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Based on the theoretical analyses of scope economies and scale economies for the banking industry, this paper examines china's situation empirically. Scale economies of the banking describes the relationship between scale and cost-revenue, while scope economies refers to the cost-revenue when banks offer sorts of products and operations. The relevant research can explain not only the present banks' mergers and takeovers, but the hybrid operation of financial industry.Scale economies and scope economies are a theoretical and empirical problem, which requires theoretical analyses and the corresponding empirical tests. Therefore some microeconomic knowledge, such as input-output theory, institutional economics, transaction cost economics and information economies, is its theoretical foundation, then China's banking is empirically tested. Considering the empirical result and the peculiar situation china's banking faces, this paper puts forward some suggestions on improving the scale economies and scope economies of china's banking.The empirical result shows that as a whole, scale economies do exist in China. This is more significant in the state-owned commercial banks, and less can be found in the joint-stock ones. In view of the tendency, little numerical change of scale economies appears in each bank, embodying the deregulation of banks' control and the increasing optimal scale as a result of the technology progress. It implies both commercial banks and joint-stock ones can save costs from expanding. In the meanwhile, deregulating banks control and investing more in technology also contribute to its optimal scale. On the other hand, both banks have collective scope economies. It demonstrates that loans, investments and deposits are more cost-saving when being offered by a single bank. No matter which angle we choose, from the whole or the individual, scope economies is more significant in joint-stock commercial banks than that in state-owned ones.Implications for China are following: firstly, deregulating controlling on banks, especially the entry regulation and Encouraging the establishment of the private banks and foreign banks to make banks more competitive and more efficient Secondly, accelerating the property reform for the commercial banks and putting their property rights in order. Thirdly, improving the banking mergers to a certain extent, and then realizing the mix operation and gain scale benefits and their anti-risk ability. Finally, informational investment should be strengthened to increase gains from technology.
Keywords/Search Tags:scale economies, scope economies, bank reform
PDF Full Text Request
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