Bhattacharyya, Surajit and Chatri, Ankit (2012): Efficiency of Indian Commercial Banks: The Post-Reform Experience from Mergers & Acquisitions.
Download (305kB) | Preview
This paper explores the impact of M&A on technical efficiency of Indian commercial banks during the second decade of reforms. We use DEA to compute the relative technical efficiency of banks that participated in M&A activities. The technical efficiency is computed under both 'common' and 'separate' frontier with the assumption of 'constant' as well as 'variable' returns to scale. We also compare the post-amalgamation efficiency scores of the participating banks with that of a control group comprising of such banks that did not undergo any consolidation since 1991. Our results indicate evidence of efficiency gains for the merging and/or acquiring banks. At the same time there are banks that have experienced deterioration in their post-M&A average efficiency levels.
|Item Type:||MPRA Paper|
|Original Title:||Efficiency of Indian Commercial Banks: The Post-Reform Experience from Mergers & Acquisitions|
|English Title:||Efficiency of Indian Commercial Banks: The Post-Reform Experience from Mergers & Acquisitions|
|Keywords:||Commercial Banking; DEA; Technical Efficiency; Control Group|
|Subjects:||C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C61 - Optimization Techniques ; Programming Models ; Dynamic Analysis
G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages
|Depositing User:||Dr. Surajit Bhattacharyya|
|Date Deposited:||08. Jun 2012 07:36|
|Last Modified:||25. May 2015 22:34|
Bagchi, A.K., and Banerjee S., 2005. How strong are the arguments for bank mergers? Economic and Political Weekly, 40(12), pp.1181-1189. Banker, R.D., Charnes, A., and Cooper, W.W., 1984. Some models for estimating technical and scale inefficiencies in Data Envelopment Analysis. Management Science, 30(9), pp.1078- 1092. Bhattacharyya, A., Lovell, C.A.K., and Sahay, P., 1997. The impact of liberalization on the productive efficiency of Indian commercial banks. European Journal of Operational Research, 98, pp.332-345. Das, A. 1997. Technical, allocative and scale efficiency of public sector banks in India. Reserve Bank of India, Occasional Papers, 18(2, 3), pp.279-297.