General Cost Structure Analysis: Theory and Application to the Banking Industry

Type
Book
Authors
ISBN 10
0792386272 
ISBN 13
9780792386278 
Category
Unknown  [ Browse Items ]
Edition
1999 
Publication Year
1999 
Publisher
Pages
136 
Tags
 
Abstract
 
Description
The subject of General Cost Structure Analysis is the quantitative analysis of cost structures with a minimum of a priori assumptions on firm technology and on firm behaviour. The study develops an innovative line of attack building on the primal characterisation of the firm's generalised shadow cost minimisation program. The resulting Flexible Cost Model (FCM) is highly conducive to modern panel data techniques and allows for a flexible specification not only of firm technology but also of firm behaviour, as shadow prices can be made input-, time- and firm-specific. FCM is applied to a panel dataset on several hundred of the largest banking institutions in the G-5 (France, Germany, Japan, United Kingdom, United States) in the 1989-1996 period. The main empirical results are summarised. In particular, FCM provides new insights into the existence of scale economies in banking and an assessment of the extent of excess labour in the G-5 banking industries, particularly as a consequence of labour market rigidities in a context of rapidly declining technology prices. FCM also provides an evaluation of the sources of the cost advantage of American and British banks in comparison to Continental European banks. - from Amzon 
Biblio Notes
 
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