An index number approach to measuring bank efficiency: an application to mergers

Article Abstract:

Article examines the change in relative productivity arising from bank mergers. The study is conducted using an index number approach to measure efficiency, lending to flexibility in accommodating hetergeneous technologies and computational simplicity. Some 2,000 banks are studied for the period 1984-1988, including a cohort of 160 banks that merged in 1986. Findings of the study support those of other studies and reports the banks achieved no gains in efficiency. However, the acquiring banks were more productive than the sample as a whole.

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Can megamergers improve bank efficiency?

Article Abstract:

Article examines the uses of fitted multiproduct translog cost function to simulate mergers between pairs of US commercial banks and looks at the impact of such mergers on total costs. A simulation technique was employed to estimate merger specific cost synergies and to distinquish the relative contributions of scale and product mix, branch closings and X-efficiency. Most cost-efficient mergers are across state lines. This result is suspected to be due to a variation in product mix.

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Similar abstracts:

• Abstracts: Output allocative and technical efficiency of banks. Efficiency effects of horizontal (in-market) bank mergers

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