The Development of the Mozambican Banking Sector and Strategic Fit of Mergers and Acquisitions: A Two‐Stage DEA Approach

Barros, Carlos Pestana; Azad, Md. Abul Kalam; Constantino, Dercio

doi:10.1111/1467-8268.12223

Cited by 18 publications

(15 citation statements)

References 59 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…ratio" efficiency levels are tested by a robust regression approach. In this approach, Tobit most regression approaches produce biased results in two-stage DEA analysis because they do no often take into account the underlying issues caused by the lack of discriminatory power of the scores computed in the first stage (Wanke, Barros, Azad, et al, 2016). The discriminatory power is low because efficiency scores tend to be upwardly biased towards one.…”

Section: Stochastic Programming Model For Combining Bootstrapped Regrmentioning

confidence: 99%

“…There are also some arguments in respect to local banks as to whether the type of ownership-state or private-may have an impact, although private banks are often expected to be more efficient. Fewer exceptions are related to incipient markets or underdeveloped countries (Wanke, Azad, Barros, & Hadi-Vencheh, 2015;Wanke, Barros, Azad, & Constantino, 2016;Wanke, Barros, & Emrouznejad, 2016;Wanke, Barros, & Macanda, 2015).…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

A dynamic network DEA model for accounting and financial indicators: A case of efficiency in MENA banking

Wänke¹,

Azad²,

Emrouznejad

et al. 2019

International Review of Economics & Finance

Self Cite

View full text Add to dashboard Cite

Middle East and North Africa (MENA) countries present a banking industry that is well-known for regulatory and cultural heterogeneity, besides ownership, origin, and type diversity. This paper explores these issues by developing a Dynamic Network DEA model in order to handle the underlying relationships among major accounting and financial indicators.Firstly, a relational model encompassing major profit sheet, balance sheet, and financial health indicators is presented under a dynamic network structure. Subsequently, the dynamic effect of carry-over indicators is incorporated into it so that efficiency scores can be properly computed for these three substructures. The impact of contextual variables related to bank ownership, its type, and whether or not it has undergone a previous merger and acquisition process is tested by means of a stochastic non-linear model solved by differential evolution, which combines bootstrapped Simplex, Tobit, Beta, and Simar and Wilson truncated regression results. The results reveal that bank type, origin, and ownership impact efficiency levels differently in terms of profit sheet, balance sheet, and financial health indicators, although the impact of culture and regulatory barriers seem to prevail at the country level.Abstract: Middle East and North Africa (MENA) countries present a banking industry that is well-known for regulatory and cultural heterogeneity, besides ownership, origin, and type diversity. This paper explores these issues by developing a Dynamic Network DEA model in order to handle the underlying relationships among major accounting and financial indicators. Firstly, a relational model encompassing major profit sheet, balance sheet, and financial health indicators is presented under a dynamic network structure. Subsequently, the dynamic effect of carry-over indicators is incorporated into it so that efficiency scores can be properly computed for these three substructures. The impact of contextual variables related to bank ownership, its type, and whether or not it has undergone a previous merger and acquisition process is tested by means of a stochastic non-linear model solved by differential evolution, which combines bootstrapped Simplex, Tobit, Beta, and Simar and Wilson truncated regression results. The results reveal that bank type, origin, and ownership impact efficiency levels differently in terms of profit sheet, balance sheet, and financial health indicators, although the impact of culture and regulatory barriers seem to prevail at the country level.

show abstract

Section: Stochastic Programming Model For Combining Bootstrapped Regrmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

A dynamic network DEA model for accounting and financial indicators: A case of efficiency in MENA banking

Wänke¹,

Azad²,

Emrouznejad

et al. 2019

International Review of Economics & Finance

Self Cite

View full text Add to dashboard Cite

show abstract

“…In this approach, Tobit (Wanke et al, 2016a), Simplex (Barros et al, 2017), Beta (Wanke et al, 2016b) and SW-bootstrapped-truncated regressions (Simar and Wilson, 2007) are individually designed to handle dependent variables bounded in 0 and 1 combined by means of stochastic non-linear programming and bootstrapping. This is justified because most regression approaches produce biased results in two-stage DEA analyses because often they do not take into account the underlying issues caused by the lack of discriminatory power of the scores computed in the first stage (Wanke et al, 2016c). The discriminatory power is low because efficiency scores tend to be upward-biased towards one.…”

Section: Robust Regression Approach For Technical Efficiency Scoresmentioning

confidence: 99%

Unveiling the Endogenous Relationship Between Technical Efficiency and Value Creation in Mergers and Acquisitions in Nigeria

Akpan

Chen

Antunes

2019

South African J Economics

Self Cite

View full text Add to dashboard Cite

There is a growing literature on how the beneficial impacts of horizontal mergers and acquisitions (M&A) should be measured. Thus far, however, there have been few studies addressing endogeneity between technical efficiency and value creation: they tend to present a bidirectional and simultaneous relationship. This research contributes to the debate by investigating the impact of voluntary horizontal M&A on these metrics in Nigeria between 1995 and 2012, in light of the individual performance of bidders, targets, and the resulting corporate companies. First, technical efficiency, technology gap ratio, and returns‐to‐scale estimates were computed based on a meta‐frontier DEA approach, together with a set of contextual variables that encompass performance indicators which reflect the value creation process. Then, robust regressions were used to discriminate these efficiency estimates in terms of such business‐related variables, correcting for endogeneity and controlling for industry and trend effects. The results reveal that these contextual variables significantly impact virtual efficiency and returns‐to‐scale levels, and that there is a trade‐off between efficiency and value creation at some point in the merging process. Managerial implications are derived.

show abstract

“…The financial holding model connotes the emergence of large banks. Consistent with prior research, the new model, which is a form of bank regulation, has potential to alter bank market structures and lending decisions (Prompitak, ; Lungu, ; Wanke et al ., ). The model could also lead to general changes in the focus of businesses — for instance, from interest‐based ventures to revenue‐ and income‐based activities.…”

Section: Introductionmentioning

confidence: 97%

Impact of the Emerging Financial Holding Company Model on Small Business Borrowers' Financial Welfare: Contemporary Evidence from Nigeria Based on the Monti‐Klein Approach

Asogwa¹,

Uzuagu²,

Okereke³

et al. 2018

African Development Review

View full text Add to dashboard Cite

This study exploits the adequacy of the Monti‐Klein model to analyse the banking firms' lending behaviour and uses the geometric lag analytic model to detect the lifespan of bank conglomeration impacts on small business financial welfare. We find that, although the impact of emerging conglomerate banks on lending to small businesses is significantly negative (δ = −0.6897; p < 0.01), the effect reverses to a pre‐conglomerate positive status within one year. Hence, bank conglomeration does not negatively affect the financial welfare of small business borrowers in the long run. Contrary to the widespread belief and fear, the negative effects are not permanent. Large banks are feared to have no time for mid‐sized businesses. We find, however, that mere increases in size, as may be caused by economic or internal growth, do not pose a threat to small businesses. Large‐sized banking firms positively and significantly correlate with small and predictable risks (δ = 1.7935; p < 0.01). Hence, contrary to what regulators fear, there is no real issue surrounding the idea that building diversifying banks will influence small business loans negatively. What matters is the means through which large banks emerge. Therefore, regulators ought to exercise caution so that they do not discourage their emergence.

show abstract

The Development of the Mozambican Banking Sector and Strategic Fit of Mergers and Acquisitions: A Two‐Stage DEA Approach

Cited by 18 publications

References 59 publications

A dynamic network DEA model for accounting and financial indicators: A case of efficiency in MENA banking

A dynamic network DEA model for accounting and financial indicators: A case of efficiency in MENA banking

Unveiling the Endogenous Relationship Between Technical Efficiency and Value Creation in Mergers and Acquisitions in Nigeria

Impact of the Emerging Financial Holding Company Model on Small Business Borrowers' Financial Welfare: Contemporary Evidence from Nigeria Based on the Monti‐Klein Approach

Contact Info

Product

Resources

About