Student or educator? Sign up with your school email and get 6 months of Pro free.
CoChat
Sign Up
Cited by 398

The DOI matches its Crossref record; 11 of the 11 references it cites were found in a registry or an index.

Bank Capitalization and Cost: Evidence of Scale Economies in Risk Management and Signaling

Hughes, Joseph P., Mester, Loretta J.·1998·Review of Economics and Statistics
DOI 10.1162/003465398557401
Open this paper in CoChat — free account

Abstract

We amend the standard cost model to account for the role of financial capital in banking. The cost function is conditioned on the level of capital, but we model the demand for financial capital so that it can serve as a cushion against insolvency for potentially risk-averse managers and as a signal of risk for less informed outsiders. Scale economies are then computed without assuming that the bank chooses a level of capitalization that minimizes cost. We find evidence of substantial scale economies and that bank managers are risk averse and use the level of financial capital to signal the level of risk.

Overview

The claims and statistics of this paper haven’t been checked yet.

Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.

A few free checks a day · papers already verified open instantly · results are public

Integrity signals

Registry

Crossref · 10.1162/003465398557401

Cites

11 of 11 references verified0 citation errors · 0 not checkable

Statistics

Verification

Claims the paper makes

The claims and statistics of this paper haven’t been checked yet.

Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.

A few free checks a day · papers already verified open instantly · results are public

Self-check

Percentages, sums and reported differences re-computed from the paper’s own numbers.

The self-check needs the paper’s full text.

Citations

Cites

Show all 11 references

Cited by

See all 398

Metadata

Authors
Hughes, J. P., & Mester, L. J.
Venue
Review of Economics and Statistics
Publisher
MIT Press - Journals
Published
1998-05
Volume
80
Issue
2
Pages
314-325
ISSN
  • 0034-6535 (ISSN-L)
  • 1530-9142
DOI
10.1162/003465398557401
OpenAlex
W2011800260
Cited by
398
References
11
FWCI
25.13
Type
journal article
Language
en
Open access
closed

About these checks

Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.

Statistics and arithmetic are recomputed, not judged.

Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.

What counts as a claim ›How we measure confidence ›How we check this ›

Are you an author, or do you see a problem with this page? Request a review

How to cite

Cite CoChat for the checks on this page, and the paper for its own findings.

This page
CoChat. (2026). Citation check: Bank Capitalization and Cost: Evidence of Scale Economies in Risk Management and Signaling. https://app.cochat.ai/papers/10.1162/003465398557401
The paper
Hughes, J. P., & Mester, L. J. (1998). Bank Capitalization and Cost: Evidence of Scale Economies in Risk Management and Signaling. Review of Economics and Statistics. https://doi.org/10.1162/003465398557401

Data sources

Bibliographic data: Semantic Scholar, OpenAlex, Crossref.

Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).

Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.