Productivity and Economies of Scale in the Production of Bank Service Value Added

This paper uses a new measure of bank service output to estimate various specifications of production and cost functions for Bank Holding Companies (BHCs) over the period 1986 to 1999. The new output series is a true flow measure of bank service value added, and it follows from a unified model of bank operation that integrates risk and the measurement of bank services. The model also establishes separability between the production function of bank services and the funds borrowed and lent - a special intermediate input for banks.

Provided by: Federal Reserve Bank of Boston Topic: Software Date Added: Sep 2003 Format: PDF

Find By Topic