Economies of scale and scope in China’s banking sector
Xiaoqing (Maggie) Fu1; Shelagh Heffernan2
Source PublicationApplied Financial Economics
ABS Journal Level2
ISSN0960-3107 1466-4305

Employing the stochastic frontier approach and expansion path measures, this article estimates economies of scale and scope in China’s banking sector during the period 1985 to 2002. The objective is to assess whether different ownership types and banking reforms affect economies of scale and scope. The traditional nonfrontier approach and the standard measures are also applied for comparison and completeness. The results indicate the presence of constant returns to scale and significant economies of scope for most joint stock banks throughout the period, and for state-owned banks in the later part of period, following a second set of bank reforms. There is evidence that use of the traditional nonfrontier model biases the measures of scale and scope economies.

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Document TypeJournal article
Corresponding AuthorShelagh Heffernan
Affiliation1.Faculty of Business Administration, University of Macau, Taipa, Macau, China
2.Faculty of Finance, Department of Banking and Finance, Cass Business School, City University, 106 Bunhill Row, London, EC1Y 8TZ, UK
First Author AffilicationFaculty of Business Administration
Recommended Citation
GB/T 7714
Xiaoqing ,Shelagh Heffernan. Economies of scale and scope in China’s banking sector[J]. Applied Financial Economics,2008,18(5):345-356.
APA Xiaoqing ,&Shelagh Heffernan.(2008).Economies of scale and scope in China’s banking sector.Applied Financial Economics,18(5),345-356.
MLA Xiaoqing ,et al."Economies of scale and scope in China’s banking sector".Applied Financial Economics 18.5(2008):345-356.
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