Abstract not found

Consolidation in the global banking industry has resulted in the emergence of financial conglomerates that conduct an extensive range of businesses with a group structure. To date, however, few studies have investigated the performance features of such groups. This study aims to extend the literature by evaluating the cost characteristics (scale, scope and x-efficiency), profit efficiency and productivity change of Italian financial conglomerates during the 1990s using both parametric and non-parametric statistical approaches. By using multiple frontier techniques the robustness of the results can be tested (methodological cross-checking). The impact of diversification and growth strategies on cost and profit efficiency is also investigated. The results seem to indicate that Italian banking groups have benefited from a consistent improvement in profit efficiency, while they have not experienced a clear increase in cost efficiency. Indeed, profit efficient banking groups display a high risk-high return profile. The restructuring process and the trend towards conglomeration do not appear to have translated into scale efficiency gains. In contrast, scope economies results give a positive indication of the benefits of diversification. JEL classification: G21; D2.

International Settlements, and from time to time by other economists, and are published by the Bank. The papers are on subjects of topical interest and are technical in character. The views expressed in them are those of their authors and not necessarily the views of the BIS. © Bank for International Settlements 1998

The cost of barriers to entry: evidence from the market for corporate euro bond underwriting