Australian Banking Efficiency and Its Relation to Stock Returns

• JOSHUA KIRKWOOD ^[1] ; DAEHOON NAHM ^[1]
  1. [1] Macquarie University

     Macquarie University

     Australia

     
• Localización: Economic record, ISSN 0013-0249, Vol. 82, Nº. 258, 2006, págs. 253-267
• Idioma: inglés
• DOI: 10.1111/j.1475-4932.2006.00338.x
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• Resumen

  • We used Data Envelopment Analysis to evaluate cost efficiency of Australian banks in producing banking services and profit between 1995 and 2002. Empirical results indicate the major banks have improved their efficiency in producing banking services and profit, while the regional banks have experienced little change in the efficiency of producing banking services, and a decline in the efficiency of producing profit. An attempt is made to relate the changes in efficiency to stock returns. Results indicate that for our sample, changes in firm efficiency are reflected in stock returns.