Journal of Banking & Finance Vol. 37 No. 5 2013
Estimating the degree of operating efficiency gains from a potential bank merger and acquisition: A DEA bootstrapped approach
Abstract
We propose a bootstrapped Data Envelopment Analysis (DEA)-based procedure to pre-calculate and pre-evaluate the short-run operating efficiency gains of a potential bank merger or acquisition (M&A). As an illustrative example, we apply our proposed procedure to investigate the degree of operating efficiency gains of 45 possible bank M&As in the Greek banking industry over the period from 2007 to 2011. The results reveal that a year before and a year after the initiation of the Greek fiscal crisis, the majority of the potential bank M&As under examination were unable to generate short-run operating efficiency gains. In addition, our results for 2011 indicate that the majority of bank M&As can lead to short-run operating efficiency gains. Finally, the empirical findings support the view that a merger or acquisition between efficient banks does not ensure an efficient bank M&A.
- DOI
- 10.1016/j.jbankfin.2012.12.009
- Volume
- 37
- Issue
- 5
- Pages
- 1658-1668
- Language
- en
- Sources
- openalex crossref bibtex:phds-export.bib