Economies of Scale, Economies of Scope and Financial Holding Companies Appropriate/Moderate Scale Management

2015 ◽  
pp. 1-13 ◽  
Author(s):  
Li Zeng
Keyword(s):  
Economies Of Scale ◽  
Scale Economies ◽  
Economies Of Scope ◽  
Holding Companies ◽  
Financial Holding ◽  
Moderate Scale ◽  
Financial Holding Companies ◽  
Scale Management

DOES SIZE MATTER? FINDING THE PROFITABILITY AND MARKETABILITY BENCHMARK OF FINANCIAL HOLDING COMPANIES

2006 ◽  
Vol 23 (02) ◽  
pp. 229-246 ◽  
Author(s):  
SHIH-FANG LO ◽  
WEN-MIN LU
Keyword(s):  
Open Economy ◽  
Economies Of Scale ◽  
Small Open Economy ◽  
Main Body ◽  
Data Envelopment ◽  
Holding Companies ◽  
Financial Holding ◽  
Financial Holding Companies ◽  
Size Matter ◽  
Better Than

The aim of this paper is to explore the efficiency and the benchmarks of financial holding companies (FHCs) for a small open economy, Taiwan. We employ a two-stage production process including profitability and marketability performance using a non-parametric frontier method — data envelopment analysis (DEA). Furthermore, the factor-specific measure and BCC (Banker–Charnes–Cooper) model are combined together not only to identify the inputs/outputs that are most important but also to distinguish those FHCs which can be treated as benchmarks. Our empirical result shows that (1) big-sized FHCs are generally more efficient than small-sized ones; (2) FHCs with the main body of insurance averagely perform better than the other two types (banks and securities); (3) while small efficient FHCs are easily to become benchmarks, big efficient FHCs are deemed as competitive niche players; (4) further mergers and acquisitions among FHCs should be considered so as to achieve economies of scale. The profitability/marketability matrix of FHCs is also presented.

The Regulation of Financial Holding Companies

1979 ◽  
Vol 92 (4) ◽  
pp. 787 ◽  
Author(s):  
Robert Charles Clark
Keyword(s):  
Holding Companies ◽  
Financial Holding ◽  
Financial Holding Companies

scholarly journals EVALUATION OF BANK MERGER IN INDONESIA: Lessons from Parametric Cost Function

2007 ◽  
Vol 8 (1) ◽  
Author(s):  
Eugenia Mardanugraha ◽  
Muliaman D. Hadad
Keyword(s):  
Cost Function ◽  
Technical Progress ◽  
Economies Of Scale ◽  
Scale Economies ◽  
Seemingly Unrelated Regression ◽  
Economies Of Scope ◽  
Bank Merger ◽  
Unrelated Regression

Merger dan akuisisi telah menjadi pilihan utama dalam pelaksanaan konsolidasi perbankan yang direkomendasikan dalam rangka penguatan industri perbankan di Indonesia. Proses merger dan konsolidasi ini membutuhkan biaya besar dan mengandung resiko, dua factor yang menyebabkan penurunan tingkat efisiensi bank yang telah melakukan merger.Penelitian ini menunjukkan bahwa proses merger menurunkan efisiensi bank, meski berdampak positif terhadap stabilitas dari efisiensi bank tersebut. Ini menunjukkan manajemen bank yang lebih baik setelah merger dan peningkatan economies of scale. Sebelum merger, bank harus meningkatkan efisiensi terlebih dahulu, misalnya dengan meningkatkan produktivitas tenaga kerja dan peningkatan utilisasi teknologi. Paper ini menunjukkan, jika skor DFA 0,7, bank dapat meraih keuntungan economies of scale, economies of scope dan technical progress yang dapat meningkatkan efisiensi.Beberapa rekomendasi yang diusulkan, pertama, Bank Indonesia seharusnya mengarahkan manajemen perbankan dalam hal pengalokasian biaya operasional secara optimal. Kedua, harus ada upaya untuk mengembalikan tingkat efisiensi bank pada level efisiensi semula. Ketiga, Bank Indonesia, harus mengarahkan perbankan untuk mengabsorpsi teknologi sejauh mungkin. Keempat, efisiensi internal merupakan aspek penting yang harus diraih sebelum proses merger dilakukan.JEL: C29, C39, D23, G21Keywords : X-efficiency, Merger, Seemingly Unrelated Regression, Cost function, Economies of scale, Bank.

scholarly journals COST LEADERSHIP STRATEGY, COMPETITIVE ADVANTAGE, AND PERFORMANCE: A CROSS-SECTIONAL STUDY IN THE CONTEXT OF MILK PROCESSING FIRMS IN KENYA

2020 ◽  
Vol 6 (2) ◽  
pp. 64-76
Author(s):  
Paul G. Kimiti ◽  
Stephen M. A. Muathe ◽  
Elishiba M. Murigi
Keyword(s):  
Competitive Advantage ◽  
Economies Of Scale ◽  
Scale Economies ◽  
Economies Of Scope ◽  
Cost Leadership ◽  
Milk Processing ◽  
Leadership Strategy ◽  
And Performance ◽  
The Relationship ◽  
Cost Leadership Strategy

Purpose of the study: Cost leadership strategy is driven by economies of scale, economies of scope, and operational efficiency is a remedy to a performance where firms are facing high costs. This study sought to investigate the influence of cost leadership strategy on the performance of milk processing firms in Kenya through the lens of competitive advantage as a mediator. Methodology: The study adopted descriptive and explanatory non-experimental research designs. It was a census of all 29 milk processing firms registered with Kenya Dairy Board as of June 2019. Sampling was done using proportionate stratified random sampling technique and data was collected using self-administered semi-structured questionnaires. The analysis was done using means, standard deviations, and regression. Main Findings: The findings showed that a cost leadership strategy had a positive and significant effect on the performance of milk processing firms in Kenya with a competitive advantage partially mediating the relationship. The constituent measures of cost leadership strategy namely economies of scale, economies of scope, and operational efficiency accounted for 40.1% of the variation in firm performance. Applications of this study: This study provides suggestions for firms to manage costs and therefore improve performance. This is by increasing the size of operations, expanding into related business areas, and improving operational processes. Novelty/originality of this study: The study examines the influence of cost leadership strategy in a new context of milk processing firms in Kenya. It also incorporates a competitive advantage as a significant variable affecting the relationship between costs and performance.  

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