Estimating the degree of operating efficiency gains from a potential bank merger and acquisition: A DEA bootstrapped approach. Journal of Banking and Finance, 37: 1658-1668

Estimating the degree of operating efficiency gains from a potential bank merger and acquisition: A DEA bootstrapped approach. Journal of Banking and Finance, 37: 1658-1668 (SCOPUS, EconLit, ISI Listed. Impact factor: 1.299 and 5-year: 1.922). In common with N. Tzeremes (2013).

We propose a bootstrapped Data Envelopment Analysis- (DEA) based procedure to pre-calculate and pre-evaluate the short-run operating efficiency gains of a potential bank merger or acquisition (M&A). As an illustrative example, we apply our proposed procedure to investigate the degree of operating efficiency gains of 45 possible bank M&As in the Greek banking industry over the period from 2007 to 2011. The results reveal that a year before and a year after the initiation of the Greek fiscal crisis, the majority of the potential bank M&As under examination were unable to generate short-run operating efficiency gains. In addition, our results for 2011 indicate that the majority of bank M&As can lead to short-run operating efficiency gains. Finally, the empirical findings support the view that a merger or acquisition between efficient banks does not ensure an efficient bank M&A.

JEL classification: C14; C61; G21