Examinando por Autor "Sun, Kai"
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Ítem Are U.S. Commercial Banks Too Big?(Universidad EAFIT, 2013-02-02) Restrepo, Diego A.; Kumbhakar, Subal C.; Sun, KaiThis paper presents new nonparametric measures of scale economies and TFP growth for U.S. banks. Unlike previous studies that use fully nonparametric models, our approach controls for time-invariant unobserved heterogeneity among banks in estimating returns to scale, TFP growth and its components. Using data for U.S. commercial banks from 2001 to 2010, we find evidence of significant scale economies across the entire bank size distribution. Returns to scale are persistent over time, decrease with bank size, and contribute significantly to TFP growth. Our results indicate that almost all small and medium size banks and most of the largest banks have strong economic incentives to keep growing. Thus, the consolidation of the banking industry is unlikely to retrench in the near future.Ítem Obelix vs. Asterix: Size of US commercial banks and its regulatory challenge(Springer International Publishing, 2015) Restrepo-Tobón, Diego; Kumbhakar, Subal C.; Sun, Kai; EAFIT University; Binghamton University, University of Stavanger Business School; University of Salford; Economía y Finanzas; Finanzas; Grupo de Investigación Finanzas y BancaBig banks pose substantial costs to society in the form of increased systemic risk and government bailouts during crises. So the question is: Should regulators limit the size of banks? To answer this question, regulators need to assess the potential costs of such regulations. If big banks enjoy substantial scale economies (i.e., average costs get lower as bank size increases), limiting the size of banks through regulations may be inefficient and likely to reduce social welfare. However, the literature offers conflicting results regarding the existence of economies of scale for the biggest US banks. We contribute to this literature using a novel approach to estimating nonparametric measures of scale economies and total factor productivity (TFP) growth. For US commercial banks, we find that around 73 % of the top one hundred banks, 98 % of medium and small banks, and seven of the top ten biggest banks by asset size exhibit substantial economies of scale. Likewise, we find that scale economies contribute positively and significantly to their TFP growth. The existence of substantial scale economies raises an important challenge for regulators to pursue size limit regulations.