Abstract 94-25 An independently managed site at the Wharton School of the University of Pennsylvania . For larger banks, constant average costs or slight diseconomies of scale prevail.
Revenues appear to be unaffected by product mix.
Managerial ability to control costs is much more important than scale and scope. On average, mergers had no significant, predictable effect on cost and efficiency. Greater local market concentration results in slightly lower deposit rates for small borrowers and slightly higher loan rates for small borrowers. Differences in local market concentration have virtually no effect on bank profitability. The implications of the U.S. experience for Europe are that cross-border mergers and acquisitions by banks in Europe are not like to lower costs by any significant amount.