Banks face slight inefficiencies in scale and product mix, impacting competitiveness.
The study looked at how the size and variety of services offered by banks affect their competitiveness. They found that banks may experience slight inefficiencies when they grow in size and offer more services, likely due to customer preferences. These findings were consistent across different cost and output measures, organizational structures, and competitive settings. This is different from previous studies that suggested banks benefit from offering a variety of services.