The Eficiency Effects of Bank Mergers and Acquisitions in a Developing Economy: Evidence from Malaysia
AbstractThis paper utilises the non-parametric frontier approach, Data Envelopment Analysis (DEA), to analyse the technical and scale efficiency of domestic incorporated Malaysian commercial banks during the merger year, pre-and post merger period. We found that Malaysian banks have exhibit a commendable overall efficiency level of 95.9% during 1998-2003 hence suggesting minimal input waste of 4.1%. Our results suggest that the merger programme was successful, particularly for the small and medium size banks, which have benefited the most from the merger and expansion via economies of scale. On the other hand our results suggest that the larger banks should shrink to benefit from scale advantages. Decision-makers hence ought to be more cautious in promoting mergers as a means to enjoying efficiency gains.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Euro-American Association of Economic Development in its journal International Journal of Applied Econometrics and Quantitative Studies .
Volume (Year): 1 (2004)
Issue (Month): 4 ()
Contact details of provider:
Web page: http://www.usc.es/economet/eaa.htm
Find related papers by JEL classification:
- C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bauer, Paul W. & Berger, Allen N. & Ferrier, Gary D. & Humphrey, David B., 1998.
"Consistency Conditions for Regulatory Analysis of Financial Institutions: A Comparison of Frontier Efficiency Methods,"
Journal of Economics and Business,
Elsevier, vol. 50(2), pages 85-114, March.
- Paul W. Bauer & Allen N. Berger & Gary D. Ferrier & David B. Humphrey, 1997. "Consistency conditions for regulatory analysis of financial institutions: a comparison of frontier efficiency methods," Finance and Economics Discussion Series 1997-50, Board of Governors of the Federal Reserve System (U.S.).
- Paul W. Bauer & Allen N. Berger & Gary D. Ferrier & David B. Humphrey, 1997. "Consistency conditions for regulatory analysis of financial institutions: a comparison of frontier efficiency methods," Financial Services working paper 97-02, Federal Reserve Bank of Cleveland.
- Berger, Allen N. & Hunter, William C. & Timme, Stephen G., 1993. "The efficiency of financial institutions: A review and preview of research past, present and future," Journal of Banking & Finance, Elsevier, vol. 17(2-3), pages 221-249, April.
- Ameer, Rashid, 2007.
"Product Market Competition, Regulation and Dividend Payout Policy of Malaysian Banks,"
8579, University Library of Munich, Germany.
- Rashid Ameer, 2008. "Product market competition, regulation and dividend payout policy of Malaysian banks," Journal of Financial Regulation and Compliance, Emerald Group Publishing, vol. 16(4), pages 318-334, November.
- Wahidudin, Ahmad Nazri, 2010. "Technical Efficiency of Commercial Banks in Malaysia: An Application of Window Data Envelopment Analysis," MPRA Paper 45136, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (M. Carmen Guisan).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.