The effect of M&A on bank efficiency in Greece

Athanasoglou, Panayiotis and Brissimis, Sophocles (2004): The effect of M&A on bank efficiency in Greece. Published in: RePEc No. Economic Bulletin 22 (January 2004): pp. 7-31.

Abstract

This paper studies the impact of recent mergers and acquisitions(M&As)on the cost and profit efficiency of banks in Greece. To this end, three methods have been applied:(i)analysis of developments in certain cost and profit indicators and their dispersion for bank groups according to their size;(ii)calculation of cost and profit inefficiency(relative to the best performer); and(iii)analysis of individual cases of M&As in terms of changes in bank costs and profitability relative to banks not involved in M&As. Additionally, the paper assesses the existence of economies of scale and the extent to which they are exploited through M&As. The empirical results indicate that M&As, in particular those involving small banks, had a positive effect on cost and profit efficiency and that scope exists for further improvement in efficiency. Also, M&As helped large banks to exploit economies of scale, which previously were found in small to medium- sized banks.

• Item Type: MPRA Paper
• Language: English
• Keywords: Mergers and acquisitions; bank cost and profit efficiency; economies of scale
• Subjects: G - Financial Economics > G3 - Corporate Finance and Governance > G34 - Mergers ; Acquisitions ; Restructuring ; Corporate Governance; G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages

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