AN EMPIRICAL ANALYSIS OF COST EFFICIENCIES IN THE REGIONAL BANKING INDUSTRY IN THE UNITED STATES.

This study analyzes economies of scale 34 regional U.S. banks over the period of ten years (2004-2013). A translog cost function is used to evaluate the cost efficiencies in the regional U.S. banking industry. Economies of scale are estimated with translog cost function for total cost, non-interest expenses, interest expenses, and employee cost with respect to the total output and the total output is defined in three different ways--total assets, total deposits, and total loans of regional U. S. banks. Estimates of cost elasticity show the extent cost efficiencies in the regional U.S. banking industry with respect to total assets, total deposits, and total loans, because with every dollar increase in assets or deposits or loans, cost is rising less than proportionately. [ABSTRACT FROM AUTHOR]