Bank efficiency and stock returns

Sarpong David, Christian Winful Ernest, Ntiamoah Jones
2017 Journal of Economics and International Finance (JEIF)  
Increased competition and globalization have made it imperative for banks to achieve high efficiency in order to generate required returns. This paper investigates the relationship between bank efficiency estimates, derived from both Stochastic Frontier Approach (SFA) and Data Envelopment Analysis (DEA) and share prices of banks listed on the Ghana stock exchange. The results give an indication that changes in cost and profit efficiency are reflected in stock performance and that efficiency is
more » ... that efficiency is directly observed by the public and reflected in share prices, though SFA efficiency scores are not reflected in share prices as being equally important as compared to DEA efficiency scores.
doi:10.5897/jeif2016.0805 fatcat:c7fh34qzqbevhola5h7jd4owle