Size and Scale Economies in Japanese Cooperative Banking

35 Pages Posted: 22 Apr 2009

See all articles by Tara Deelchand

Tara Deelchand

affiliation not provided to SSRN

Carol Padgett

University of Reading - ICMA Centre

Date Written: April 22, 2009

Abstract

This paper examines the relationship between size and scale economies of cooperative banks in Japan (namely Shinkin and credit cooperatives). We use the translog cost-function methodology and intermediation approach coupled with a large set of both cross-sectional and panel data over the period 2003 to 2006. We find significant diseconomies of scale for both the full sample and sub-samples of small and large cooperative banks. It is of interest to note that larger cooperative banks were at cost disadvantage as compared to small ones throughout most of the period. Thus, bigger is not always better, at least in cost terms.

Keywords: Cooperative banks, Size, Scale economies, Shinkin and credit cooperatives, Translog-cost function

JEL Classification: D21, D24, G21, L23, N25

Suggested Citation

Deelchand, Tara and Padgett, Carol, Size and Scale Economies in Japanese Cooperative Banking (April 22, 2009). Available at SSRN: https://ssrn.com/abstract=1393263 or http://dx.doi.org/10.2139/ssrn.1393263

Tara Deelchand

affiliation not provided to SSRN ( email )

Carol Padgett (Contact Author)

University of Reading - ICMA Centre ( email )

Whiteknights Park
P.O. Box 242
Reading RG6 6BA
United Kingdom

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