Does efficiency matter?: efficiency of Australian banks and links to stock returns

Title: Does efficiency matter?: efficiency of Australian banks and links to stock returns
Creator: Xiang, Dong; Shamsuddin, Abul
Relation: 22nd Australasian Finance and Banking Conference 2009 (AFBC 2009). Proceedings of the 22nd Australasian Finance and Banking Conference 2009 (Sydney 16-18 December, 2009)
Relation: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1460378
Publisher: Social Science Electronic Publishing
Resource Type: conference paper
Date: 2009
Description: The stochastic frontier analysis is employed to investigate efficiency of publicly listed Australian banks over the period 1985-2008. The results suggest that technical, cost and profit efficiency of Australian banks have improved over our sample span. Large banks have attained a higher level of cost efficiency but lower level of technical efficiency compared to small banks. No significant difference between the two groups is found in terms of profit efficiency. A pooled regression of bank stock return on bank efficiency suggests that an improvement in technical, cost or profit efficiency contributes to the market value of a bank. Thus, the shareholder wealth maximization goal is aligned with the goal of maximizing bank efficiency in the Australian context.
Subject: bank efficiency; SFA analysis; distance functions; market models
Identifier: http://hdl.handle.net/1959.13/919850
Identifier: uon:9002
Language: eng
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