Mexican Banking Regulation: Evidence of the Appropriateness of Government Intervention

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CFAES_ESO_1561.pdf (790.77 KB)

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1989-03

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Ohio State University. Department of Agricultural, Environmental, and Development Economics

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In this paper we investigate the validity of two assumptions frequently used to justify the transformation of the Mexican banking system through federal regulation. These assumptions are: (i) the alleged existence of economies of scale, and (ii) a homogeneous structure of the Mexican banking system. Econometric evidence from banking data over the period 1980 - 1982 suggests that neither of these assumptions are likely valid. The Mexican banking system is subject to constant rather than increasing returns to scale.

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http://hdl.handle.net/1811/66093

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ESO: Economics and Sociology Occasional Papers (AEDE)