Speaker: Subal C. Kumbhakar, State University of New York at Binghamton
Host: GAN Li, Dean of RIEM
Time: 13:55--15:50, Nov.15, Friday
Venue: 305 RIEM Building, Guanghua Campus
Abstract: This paper presents new nonparametric measures of scale economies and TFP growth for U.S. banks. Unlike previous studies that use fully nonparametric models, our approach controls for time-invariant unobserved heterogeneity among banks in estimating returns to scale, TFP growth and its components. Using data for U.S. commercial banks from 2001 to 2010, we find evidence of significant scale economies across the entire bank size distribution. Returns to scale are persistent over time, decrease with bank size, and contribute significantly to TFP growth. Our results indicate that almost all small and medium size banks and most of the largest banks have strong economic incentives to keep growing. Thus, the consolidation of the banking industry is unlikely to retrench in the near future.
Profile: Dr. Subal C. Kumbhakar is the co-author of the highly influential book Stochastic Frontier Analysis, and lead developer of SFA software. Now he is a Distinguished University Professor at the State University of New York at Binghamton, where he teaches theoretical and applied econometrics and statistics courses at both undergraduate and postgraduate level. Dr. Kumbhakar is a world-renowned expert in productivity and performance measurement, with particular emphasis on the theory and application of stochastic frontier analysis (SFA). He has been working in the area of efficiency and productivity for the last 25 years, and has measured performance for a variety of industries such as energy, post, transport, water, agriculture, manufacturing, banking and school systems. Dr. Kumbhakar is a highly sought-after keynote speaker at international productivity and efficiency conferences.
