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|Title:||Share performance and profit efficiency of banks in an oligopolistic market: Evidence from Singapore|
|Authors:||Chu, S.F. |
|Source:||Chu, S.F.,Lim, G.H. (1998). Share performance and profit efficiency of banks in an oligopolistic market: Evidence from Singapore. Journal of Multinational Financial Management 8 (2-3) : 155-168. ScholarBank@NUS Repository.|
|Abstract:||Using data envelopment analysis techniques, we evaluate the relative cost and profit efficiencies of a panel of six Singapore-listed banks during the period 1992-96. Average profit efficiency (83%) was found to be significantly lower than average cost efficiency (95%). The mean profit efficiency is, however, higher than the averages of banks in the US (64%) and Spain (72%). In a follow-up regression study using the modified efficiency scores of Anderson and Peterson (Management Science, 39 (1993) 1261-1264), we find that percentage changes in the prices of the bank shares reflect percentage changes in profit rather than cost efficiencies (correlation coefficients of 0.82 versus 0.32). This opens up a new window for understanding share price fluctuations and is to be expected as shareholders desire dividends which are paid out of profits and not income.|
|Source Title:||Journal of Multinational Financial Management|
|Appears in Collections:||Staff Publications|
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