COST ECONOMIES IN FRENCH BANKING AND SAVINGS INSTITUTIONS, IMPACT OF SIZE AND PRODUCT DIVERSIFICATION

The present study seeks to compare economies of scale and scope between banks and savings institutions. Depending on the specific nature of each of these two categories of institution, we use one or the other of the two dominant approaches in the literature on the theory of the banking firm: the production approach and the intermediation approach. In our model of the banking cost function, we use both Cobb-Douglas and Translog specifications.