Economic Analysis of Economies of Scope in the Financial Industry Mixed Operations

Author: Xu Wenbin
Publisher:
Publish Date: 2006-12-01
Features: In the 1990s, with the development of the fifth wave of cross-border, cross-industry mergers and acquisitions on a global scale, the financial industry of major Western countries had completed its transformation from traditional commercial banking to integrated, universal banking. Financial integration became the background condition and original driving force for the global financial industry's development toward integrated operations. To adapt to international financial market competition and respond to the challenges of global economic integration, China had to follow the trend of international economic development. The author first uses mathematical models to theoretically analyze the possibility of economies of scope arising from integrated operations. Second, from an empirical perspective, he analyzes and validates the existence of economies of scope in integrated operations, aiming to construct an analytical framework for economies of scope in integrated operations. This framework provides evidence and reference suggestions for China to develop the advanced form of integrated operations—universal banking.