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Is the Acquirer More Efficient Than Target? An Empirical Study from Selected Bank Consolidation in India

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Abstract

This paper tries to examine whether the acquirer banks are more efficient than the target banks in 16 consolidation deals in Indian banking sector during the period 1995–2013. We find that as far as technical efficiency is concerned, the hypothesis that the acquirer is more efficient than the target bank is supported in almost all the cases except for the deal between ICICI Bank and Bank of Madura in which Bank of Madura (target) was more efficient than ICICI bank (the acquirer). Finally, both the input and output models of overall efficiency are clearly showed that the acquirer is more efficient than the target, but it does not reflect in scale efficiency.

Keywords

Consolidation Indian commercial banks Pure technical efficiency and scale efficiency DEA input and output-oriented models 

Notes

Acknowledgements

I am grateful to my supervisor Dr. Mandira Sarma, who has cared about my research work and given full support to me to finish this so early.

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© Springer Nature Singapore Pte Ltd. 2017

Authors and Affiliations

  1. 1.School of International StudiesCentre for International Trade and Development, Jawaharlal Nehru UniversityNew DelhiIndia

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