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Efficiency, Productivity and Stock Performance: Evidence from the Turkish Banking Sector

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  • Saadet Kasman

    ()
    (Department of Economics, Faculty of Business, Dokuz Eylul University, Turkey)

  • Adnan Kasman

    ()
    (Department of Economics, Faculty of Business, Dokuz Eylul University, Turkey)

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    Abstract

    This paper investigates the link between stock performance of the listed commercial banks in the Turkish stock exchange and three measures of bank performance, such as technical efficiency, scale efficiency and productivity for the period 1998-2008. The relationship between efficiency and stock returns is investigated by running a regression of stock returns on measures of performance and some bank specific variables. The results indicate that the changes in three measures of performance have positive and significant effect on stock returns, suggesting that stocks of technical efficient, scale efficient and productive banks tend to outperform their inefficient and unproductive rivals.

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    File URL: http://www.panoeconomicus.rs/casopis/2011_3/05%20Saadet%20Kasman.pdf
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    Bibliographic Info

    Article provided by Savez ekonomista Vojvodine, Novi Sad, Serbia in its journal Panoeconomicus.

    Volume (Year): 58 (2011)
    Issue (Month): 3 (September)
    Pages: 355-372

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    Handle: RePEc:voj:journl:v:58:y:2011:i:3:p:355-372

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    Web page: http://www.panoeconomicus.rs/

    Related research

    Keywords: Stock returns; Technical efficiency; Productivity; Scale efficiency; Turkish banking;

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    References

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    1. Isik, Ihsan & Hassan, M. Kabir, 2002. "Technical, scale and allocative efficiencies of Turkish banking industry," Journal of Banking & Finance, Elsevier, vol. 26(4), pages 719-766, April.
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    6. Gerald T. Garvey & Todd T. Milbourn, 2000. "EVA versus Earnings: Does it Matter which is More Highly Correlated with Stock Returns?," Claremont Colleges Working Papers 2000-52, Claremont Colleges.
    7. Chu, Sing Fat & Lim, Guan Hua, 1998. "Share performance and profit efficiency of banks in an oligopolistic market: evidence from Singapore," Journal of Multinational Financial Management, Elsevier, vol. 8(2-3), pages 155-168, September.
    8. Leigh M. Drake & Maximilian J. B. Hall & Richard Simper, 2005. "The Impact of Macroeconomic and Regulatory Factors on Bank Efficiency: A Non-Parametric Analysis of Hong Kong's Banking System," Working Papers 012005, Hong Kong Institute for Monetary Research.
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    11. Joshua Kirkwood & Daehoon Nahm, 2006. "Australian Banking Efficiency and Its Relation to Stock Returns," The Economic Record, The Economic Society of Australia, vol. 82(258), pages 253-267, 09.
    12. Adnan Kasman, 2003. "Banking Efficiency During the Financial Crisis Period," Istanbul Stock Exchange Review, Research and Business Development Department, Borsa Istanbul, vol. 7(25-26), pages 65-82.
    13. Adnan Kasman & Canan Yildirim, 2006. "Cost and profit efficiencies in transition banking: the case of new EU members," Applied Economics, Taylor & Francis Journals, vol. 38(9), pages 1079-1090.
    14. Liadaki, Aggeliki & Gaganis, Chrysovalantis, 2010. "Efficiency and stock performance of EU banks: Is there a relationship?," Omega, Elsevier, vol. 38(5), pages 254-259, October.
    15. Isik, Ihsan & Kabir Hassan, M., 2003. "Financial deregulation and total factor productivity change: An empirical study of Turkish commercial banks," Journal of Banking & Finance, Elsevier, vol. 27(8), pages 1455-1485, August.
    16. Elena Beccalli & Barbara Casu & Claudia Girardone, 2006. "Efficiency and Stock Performance in European Banking," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 33(1-2), pages 245-262.
    17. Claudia Girardone & Philip Molyneux & Edward Gardener, 2004. "Analysing the determinants of bank efficiency: the case of Italian banks," Applied Economics, Taylor & Francis Journals, vol. 36(3), pages 215-227.
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    Cited by:
    1. Matthias Nnadi & Nyema Wogboroma & Bariyima Kabel, 2013. "Determinants of Dividend Policy: Evidence from Listed Firms in the African Stock Exchanges," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 60(6), pages 725-741, December.
    2. Yasemin Keskin Benli & Suleyman Degirmen, 2013. "The Application of Data Envelopment Analysis Based Malmquist Total Factor Productivity Index: Empirical Evidence in Turkish Banking Sector," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 60(2), pages 139-159, April.

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