Emir Malikov (Economics), together with his former doctoral advisee, Jingfang Zhang who is currently at the University of Kentucky, co-authored an article, "Off-Balance Sheet Activities and Scope Economies in U.S. Banking," that has been accepted at the Journal of Banking & Finance, an A-level journal on the Lee Business School journal list. In this paper, the authors provide new and more robust evidence about "scope economies" (i.e., cost sayings via synergetic input complementarities and risk diversification) in multi-business commercial banks in the U.S. They improve upon the prior literature not only by analyzing the most recent data and accounting for bank’s nontraditional off-balance sheet operations, but also in multiple methodological ways. Contrary to earlier studies, the authors find strong evidence in support of significantly positive scope economies across banks of virtually all sizes, calling into question a consensus belief of the opposite among both the academics and regulators. This research was in part supported by funding from the Troesh Center for Entrepreneurship & Innovation at UNLV.
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