The Effect of Economies of Scope on Iranian Banking Sector Structure:
An Application of Multi-Product Function and Multi-Level Effect Approaches
The Effect of Economies of Scope on Iranian Banking Sector Structure:
An Application of Multi-Product Function and Multi-Level Effect Approaches
Author(s): Kamran Mahmodpour, Mohammad Nabi Shahiki Tash, Mohammad Hassan FotrosSubject(s): Economy, National Economy, Business Economy / Management, Financial Markets
Published by: Editura Universităţii »Alexandru Ioan Cuza« din Iaşi
Keywords: Iranian banking sector; variety-based economies; multi-level model; market structure; the generalized Panzar-Rosse model;
Summary/Abstract: This paper investigates, using a multi-product paradigm, the market structure of the Iranian banking sector to evaluate the role of scale. In so doing, we checked for economies of scope by multi-product cost function as well as the impact of potential economies on the banking sector structure including 18 banks during the period 2008–2014. The changes in Panzar-Rosse H-Statistic as a result of the variety in products reflect changes in the monopolistic power. The results show that an increase in the variety of offered products increases banks’ monopolistic power.
Journal: Scientific Annals of Economics and Business
- Issue Year: 65/2018
- Issue No: 4
- Page Range: 459-475
- Page Count: 17
- Language: English
