Measuring Scale Economies in a Heterogeneous Industry: The Case of European Settlement Institutions
Patrick Van Cayseele and Christophe Wuyts, Vienna, 2006, ISBN 978-3-902109-33-0
We examine whether the European settlement institutions are technically efficient. This is done by means of estimating a translog cost function, and investigating whether scale economies are fully exploited. Since the sample is quite heterogeneous, fixed effects regression is introduced. From the results obtained, there clearly are economies of scale in this industry throughout all output ranges. This implies that further consolidation in this industry probably is ahead.
The European clearing, settlement and safekeeping industry
Review of the literature