Obelix vs. Asterix: Size of US commercial banks and its regulatory challenge

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dc.citation.epage168
dc.citation.issue2
dc.citation.journalTitleJournal of Regulatory Economicseng
dc.citation.spage125
dc.citation.volume48
dc.contributor.affiliationEAFIT Universityspa
dc.contributor.affiliationBinghamton University, University of Stavanger Business Schoolspa
dc.contributor.affiliationUniversity of Salfordspa
dc.contributor.authorRestrepo-Tobón, Diegospa
dc.contributor.authorKumbhakar, Subal C.spa
dc.contributor.authorSun, Kaispa
dc.contributor.departmentEconomía y Finanzasspa
dc.contributor.departmentFinanzasspa
dc.contributor.programGrupo de Investigación Finanzas y Bancaspa
dc.date2015
dc.date.accessioned2015-11-06T21:15:35Z
dc.date.available2015-11-06T21:15:35Z
dc.date.issued2015
dc.description.abstractBig 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.eng
dc.identifier.doi10.1007/s11149-015-9275-1
dc.identifier.issn1573-0468
dc.identifier.urihttp://hdl.handle.net/10784/7615
dc.language.isoengeng
dc.publisherSpringer International Publishingeng
dc.relation.ispartofJournal of Regulatory Economics. Vol. 48, (2), 2015, pp.125-168spa
dc.relation.isversionofhttp://link.springer.com/article/10.1007/s11149-015-9275-1
dc.relation.urihttp://link.springer.com/article/10.1007/s11149-015-9275-1
dc.rightsrestrictedAccesseng
dc.rights© Springer International Publishing AG, Part of Springer Science+Business Mediaspa
dc.rights.accessrightsinfo:eu-repo/semantics/restrictedAccesseng
dc.rights.localAcceso restringidospa
dc.sourceJournal of Regulatory Economics. Vol. 48, (2), 2015, pp.125-168spa
dc.subject.keywordBank regulationeng
dc.subject.keywordEconomies of scaleeng
dc.subject.keywordReturns to scaleeng
dc.subject.keywordNonparametric methodseng
dc.titleObelix vs. Asterix: Size of US commercial banks and its regulatory challengeeng
dc.typearticleeng
dc.typeinfo:eu-repo/semantics/articleeng
dc.typeinfo:eu-repo/semantics/publishedVersioneng
dc.type.hasVersionObra publicadaspa
dc.type.localArtículospa

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