An index number approach to measuring bank efficiency: An application to mergers

Fixler D.J. and Zieschang K.D. (1993) An index number approach to measuring bank efficiency: An application to mergers. Journal of Banking and Finance, 17 2-3: 437-450. doi:10.1016/0378-4266(93)90043-D


Author Fixler D.J.
Zieschang K.D.
Title An index number approach to measuring bank efficiency: An application to mergers
Journal name Journal of Banking and Finance   Check publisher's open access policy
ISSN 0378-4266
Publication date 1993
Sub-type Article (original research)
DOI 10.1016/0378-4266(93)90043-D
Volume 17
Issue 2-3
Start page 437
End page 450
Total pages 14
Subject 2002 Cultural Studies
2003 Language Studies
Abstract The current wave of bank mergers has resulted in an interest in the measurement of consequent efficiencies. Previous studies have generally focused on the measurement of merger-induced cost efficiencies. In this paper, we turn to the production side and examine the change in relative productivity arising from bank mergers. After deriving our superlative multilateral productivity index, we compute the indexes for our entire sample of banks, approximately 2,000 banks in each of the years 1984-1988, and for a cohort of 160 banks that merged in 1986. We find that acquiring banks achieve no gains in efficiency, and this finding supports those of other studies. On the other hand, we find that our acquiring banks are consistently more productive than the sample as a whole. By implication, if mergers can be generally characterized as the acquisition by a relatively more productive bank of a relatively less productive bank, an empirically valid supposition, then industry performance should improve as a result of these mergers.
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status Unknown

Document type: Journal Article
Sub-type: Article (original research)
Collection: Scopus Import
 
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Citation counts: TR Web of Science Citation Count  Cited 22 times in Thomson Reuters Web of Science Article | Citations
Scopus Citation Count Cited 33 times in Scopus Article | Citations
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Created: Fri, 11 Mar 2016, 11:03:01 EST by Anthony Yeates