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The Impact of M&A on Technical Efficiency, Scale Efficiency and Productivity Change in the Polish Banking Sector: a Non-Parametric Approach

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Abstract

In recent decades, the banking sectors of many transition countries have been subject to globalization, deregulation and liberalization similar to that in industrialized countries such as the EU countries and the USA. Those changes are linked with merger and acquisition (M&A) processes aimed at increasing banking competitiveness and efficiency. Banking efficiency is a crucial issue for transition countries. For most advanced transition ountries, the question of the degree of their banks’ competitiveness and efficiency has become an important issue in relation to EU accession. This paper examines the impact of M&A on the efficiency of Polish commercial banks in the period 1997-2001. The aim of this paper is to check whether M&A increased the efficiency and productivity of commercial banks. This paper employs Data Envelopment Analysis (DEA)3 to investigate technical efficiency, scale efficiency and productivity. It considers all the models that are based on the output measures of technical and scale efficiency. Productivity growth has been analyzed via the Malmquist output-based productivity index (M), which was divided into technical efficiency change (E) and technological change (TC).

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  • Malgorzata Pawlowska, 2003. "The Impact of M&A on Technical Efficiency, Scale Efficiency and Productivity Change in the Polish Banking Sector: a Non-Parametric Approach," NBP Working Papers 29, Narodowy Bank Polski.
    • Handle: RePEc:nbp:nbpmis:29
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    1. David C. Wheelock & Paul W. Wilson, 1995. "Evaluating the efficiency of commercial banks: does our view of what banks do matter?," Review, Federal Reserve Bank of St. Louis, issue Jul, pages 39-52.
    2. Fried, Harold O. & Lovell, C. A. Knox & Schmidt, Shelton S. (ed.), 1993. "The Measurement of Productive Efficiency: Techniques and Applications," OUP Catalogue, Oxford University Press, number 9780195072181.
    3. Resti, Andrea, 1997. "Evaluating the cost-efficiency of the Italian Banking System: What can be learned from the joint application of parametric and non-parametric techniques," Journal of Banking & Finance, Elsevier, vol. 21(2), pages 221-250, February.
    4. Sherman, H. David & Gold, Franklin, 1985. "Bank branch operating efficiency : Evaluation with Data Envelopment Analysis," Journal of Banking & Finance, Elsevier, vol. 9(2), pages 297-315, June.
    5. Löthgren, Mickael & Tambour, Magnus, 1996. "Alternative Approaches to Estimate Returns to Scale in DEA- Models," SSE/EFI Working Paper Series in Economics and Finance 90, Stockholm School of Economics.
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    Cited by:

    1. Daniel Stavarek, 2005. "Efficiency of Banks in Regions at Different Stage of European Integration Process," Finance 0502020, University Library of Munich, Germany.

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    More about this item

    Keywords

    Efficiency; DEA; Merger and Acquisition;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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