We formulate and estimate a multioutput bank’s cost function amenable for distinguishing between economies of scale and economies of network density. We find significant returns to network density, especially for smaller banks. Diseconomies of scale are found for the larger banks, whereas the hypothesis of constant returns to scale could not be rejected for the smaller banks.
ASJC Scopus subject areas
- Statistics and Probability
- Social Sciences (miscellaneous)
- Economics and Econometrics
- Statistics, Probability and Uncertainty