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Volume :9 Issue : 2 2002
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Efficiency Effect of Mega-Banking: The Case of the Commercial Banking Industry in the State of Kuwait
Auther : Abdullah M. Al-Obaidan
Globalization induced the creation of large multinational and multi-service banks (mega-banks). Consequently, banks that adopt the most efficient product-mix strategy will be in a position to exploit the relative cost advantages and to continue to grow. This study utilizes the most advanced econometric models to examine the efficiency effect of providing relatively narrow financial services within limited local markets in the State of Kuwait. The empirical results suggest that national banks in the State of Kuwait exhausted the possibility to improve the utility of available resources. The study presents relevant recommendations to enable national banks to face the eminent competition from highly efficient mega-banks.