Are Scale Economies in Banking Elusive or Illusive? Evidence Obtained by Incorporating Capital Structure and Risk-Taking Into Models of Bank Production

By Joseph P. Hughes, L. Mester, Choon-Geol Moon. 2000

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View Paper: https://www.semanticscholar.org/paper/ecccd1def0cf2701c95d2a55479044bc4a4ab150

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Citations in the corpus

Bank supervision, regulation, and efficiency: evidence from the European Union (2012, background): “…influence efficiency levels as big banks are able to hold less capital compared to their smaller counterparts, and may also be able to have greater portfolio and loan diversification and gain from size advantages (Hughes et al., 2001; Yildirim and Philippatos, 2007; Altunbas et al., 2007).”
Small European banks: Benefits from diversification? (2007, positive): “Finally, our results also illustrate that asset growth is significantly associated with mean profitability and that small banks can bolster their risk-adjusted performance by increasing bank size, which is consistent with research on scale economies (Hughes et al., 2001).”
Risk in Islamic Banking (2012, background): “Large banks can benefit from both scale economies and diversification as claimed by Hughes et al. (2001).”
Efficiency in Banking: Theory, Practice, and Evidence (2008, methodology): “Hughes (1999) and Hughes, Mester, and Moon (2001) report that the regression of ln(market value of equity) on ln(E(πi /k i)) and ln(σi) for 190 publicly compares the measure of return efficiency with cost and profit efficiency estimated by standard formulations and finds evidence that efficient…”
Who Said Large Banks Don't Experience Scale Economies? Evidence from a Risk-Return-Driven Cost Function (2013, neutral): “4 For empirical evidence of these dichotomous strategies, see Keeley (1990) and Hughes, Lang, Moon, and Pagano (1997 and 2004).”
Performance and Merton-type default risk of listed banks in the EU: A panel VAR approach (2009, background): “…strand of the literature has examined the relationship between risk and efficiency by incorporating in the efficient frontier various aspects of risk (see among others Hughes and Mester; 1993; Mester, 1996; Hughes et al., 2000 Altunbas et al., 2001; Maudos et al., 2002; Pastor and Serrano, 2005).”
Examining the Relationships between Capital, Risk and Efficiency in European Banking (2007, neutral): “Big banks, typically hold less capital than smaller banks, they may also be more diversified and gain from other size advantages (Peltzman, 1984; Hughes et al., 2001) so it is important to control for this factor.”