Efficiency of Indian Commercial Banks: The Post-Reform Experience from Mergers & Acquisitions
AbstractThis 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.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 39299.
Date of creation: 05 Jun 2012
Date of revision:
Commercial Banking; DEA; Technical Efficiency; Control Group;
Find related papers by JEL classification:
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-06-25 (All new papers)
- NEP-BAN-2012-06-25 (Banking)
- NEP-COM-2012-06-25 (Industrial Competition)
- NEP-EFF-2012-06-25 (Efficiency & Productivity)
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.:
- Bhattacharyya, Arunava & Lovell, C. A. K. & Sahay, Pankaj, 1997. "The impact of liberalization on the productive efficiency of Indian commercial banks," European Journal of Operational Research, Elsevier, vol. 98(2), pages 332-345, April.
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