Do Consumers Pay for One-Stop Banking? Evidence from a Non-Standard Revenue Function
Posted: 15 Apr 1998
Date Written: August 1993
Synergies in providing financial services can reduce costs due to joint production (cost economies of scope) or raise revenues due to joint consumption (revenue economies of scope). Cost economies of scope between bank deposits and loans were found to be small elsewhere. Revenue economies of scope are investigated here for the first time and found to be non-existent over 1978-1990 for both small and large banks and for those on or off the revenue-efficient frontier. The lack of synergies between deposits and loans--where benefits are most likely to occur--suggests few synergies from an expansion of banking powers.
JEL Classification: G21, L89, D20
Suggested Citation: Suggested Citation