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Bank efficiency and share performance: evidence from Greece


Reference:

Pasiouras, F., Liadaki, A. and Zopounidis, C., 2008. Bank efficiency and share performance: evidence from Greece. Applied Financial Economics, 18 (14), pp. 1121-1130.

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Official URL:

http://dx.doi.org/10.1080/09603100701564346

Abstract

This article examines for the first time the association between the efficiency of Greek banks and their share price performance. Our analysis consists of three parts. First, we calculate the annual share price returns of the banks for each year between 2001 and 2005. Then we use data envelopment analysis to estimate the efficiency of the banks between 2000 and 2005. Finally, we regress the annual share price returns over the annual change of efficiency while controlling for changes in banks' size and risk. We find that the average technical efficiency under constant returns to scale is 0.931 and increases to 0.977 under variable returns to scale, resulting in a scale efficiency of 0.953. The regression results indicate a positive and statistically significant relationship between annual changes in technical efficiency and stock returns, while changes in scale efficiency have no impact on stock returns.

Details

Item Type Articles
CreatorsPasiouras, F., Liadaki, A. and Zopounidis, C.
DOI10.1080/09603100701564346
DepartmentsSchool of Management
RefereedYes
StatusPublished
ID Code14522

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