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Title
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The Effect of Economies of Scope on Iranian Banking Sector Structure: An Application of Multi-Product Function and Multi-Level Effect Approaches
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Type
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JournalPaper
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Keywords
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Iranian banking sector; variety-based economies; multi-level model; market structure; the generalized Panzar-Rosse model.
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Abstract
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This paper investigates, using a multi-product paradigm, the market structure of the Iranian banking sector to evaluate the role of scale. In so doing, we checked for economies of scope by multi-product cost function as well as the impact of potential economies on the banking sector structure including 18 banks during the period 2008–2014. The changes in Panzar-Rosse H-Statistic as a result of the variety in products reflect changes in the monopolistic power. The results show that an increase in the variety of offered products increases banks’ monopolistic power.
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Researchers
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Mohammad Hassan Fotros (Third Researcher), Mohammad Nabi Shahiki Tash (Second Researcher), Kamran Mahmodpor (First Researcher)
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