Economies of scope in the Japanese banking industry

IF 4.8 2区 经济学 Q1 BUSINESS, FINANCE
Yichang Wu
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Abstract

Economies of scope are usually considered a key factor in explaining bank diversification benefits, as joint production can help spread costs across different operations. However, previous studies have yielded little evidence of scope economies in the banking sector, which fails to explain the empirical results of diversification benefits, especially in Japan. Given that most relevant studies were conducted prior to 2000 and newer methodological approaches have emerged to enhance estimation accuracy, we refocus to this topic and explore the relationship with bank diversification. In this paper, we estimate economies of scope while considering the growing off-balance sheet activities within the Japanese banking industry. Using a sample including 120 Japanese banks from 2000 to 2020, we estimate the cost frontier with a translog cost function through the stochastic frontier analysis (SFA) approach. In addition to the traditional measures, we incorporate a new measure of scope economies proposed by Chavas and Kim (2010), allowing us to decompose the scope economies into four different effects. Our findings suggest that nearly all Japanese banks exhibit economies of scope, which may explain the diversification benefits observed in Japan. Furthermore, we find a negative relationship between economies of scope and the level of bank diversification.
日本银行业的范围经济
范围经济通常被认为是解释银行多元化效益的一个关键因素,因为联合生产有助于在不同业务之间分摊成本。然而,以往的研究几乎没有发现银行业存在范围经济的证据,这就无法解释多元化收益的实证结果,尤其是在日本。鉴于大多数相关研究都是在 2000 年之前进行的,并且出现了更新的方法来提高估算的准确性,我们重新关注这一主题,并探讨其与银行多元化的关系。在本文中,我们在考虑日本银行业不断增长的表外活动的同时,对范围经济进行了估算。我们以 2000 年至 2020 年期间的 120 家日本银行为样本,通过随机前沿分析(SFA)方法估算了具有平移成本函数的成本前沿。除了传统的衡量方法外,我们还采用了 Chavas 和 Kim(2010 年)提出的范围经济的新衡量方法,从而将范围经济分解为四种不同的效应。我们的研究结果表明,几乎所有的日本银行都表现出了范围经济,这或许可以解释在日本观察到的多元化效益。此外,我们还发现范围经济与银行多元化水平之间存在负相关关系。
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来源期刊
Pacific-Basin Finance Journal
Pacific-Basin Finance Journal BUSINESS, FINANCE-
CiteScore
6.80
自引率
6.50%
发文量
157
期刊介绍: The Pacific-Basin Finance Journal is aimed at providing a specialized forum for the publication of academic research on capital markets of the Asia-Pacific countries. Primary emphasis will be placed on the highest quality empirical and theoretical research in the following areas: • Market Micro-structure; • Investment and Portfolio Management; • Theories of Market Equilibrium; • Valuation of Financial and Real Assets; • Behavior of Asset Prices in Financial Sectors; • Normative Theory of Financial Management; • Capital Markets of Development; • Market Mechanisms.
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