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Bank Mergers Performance and the Determinants of Singaporean Banks’ Efficiency: An Application of Two-Stage Banking Models

Gadjah Mada International Journal of Business (GamaIJB) · Vol. 9 No. 1 (2007) · pp. 19–39

DOI
10.22146/gamaijb.5602
ISSN
2338-7238, 1411-1128
Published
2007-01-12
Publisher
Master in Management, Faculty of Economics and Business, Universitas Gadjah Mada
Language
eng

Abstract

An event study window analysis of Data Envelopment Analysis (DEA) is employed in this study to investigate the effect of mergers and acquisitions on Singaporean domestic banking groups’ efficiency. The results suggest that the mergers have resulted in a higher post-merger mean overall efficiency of Singaporean banking groups. However, from the scale efficiency perspective, our findings do not support further consolidation in the Singaporean banking sector. We find mixed evidence of the efficiency characteristics of the acquirers and targets banks. Hence, the findings do not fully support the hypothesis that a more (less) efficient bank becomes the acquirer (target). In most cases, our results further confirm the hypothesis that the acquiring bank’s mean overall efficiency improves (deteriorates) post-merger resulted from the merger with a more (less) efficient bank. Tobit regression model is employed to determine factors affecting bank performance, and the results suggest that bank profitability has a significantly positive impact on bank efficiency, whereas poor loan quality has a significantly negative influence on bank performance.

Keywords

Collaboration network of the authors

2 authors · 1 co-authorship link · 1 across different organisations

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  • University of Malaya
  • University of Nottingham
  • Different organisations
  • Same organisation
  • Affiliation unknown
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Affiliations come from OpenAlex; journal OAI-PMH metadata carries none. Authors without an OpenAlex ID are matched by name, which can merge or split people.

Metadata source: OAI-PMH (metadata jurnal) https://journal.ugm.ac.id/gamaijb/oai, first harvested 28 Okt 2026, last seen 28 Okt 2026.
Original metadata (oai_dc) 
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	<dc:title xml:lang="en-US">Bank Mergers Performance and the Determinants of Singaporean Banks’ Efficiency: An Application of Two-Stage Banking Models</dc:title>
	<dc:creator>Sufian, Fadzlan</dc:creator>
	<dc:creator>Abd. Majid, Muhamed-Zulkhibri</dc:creator>
	<dc:subject xml:lang="en-US">bank merger; data envelopment analysis; Singapore; Tobit model</dc:subject>
	<dc:description xml:lang="en-US">An event study window analysis of Data Envelopment Analysis (DEA) is employed in this study to investigate the effect of mergers and acquisitions on Singaporean domestic banking groups’ efficiency. The results suggest that the mergers have resulted in a higher post-merger mean overall efficiency of Singaporean banking groups. However, from the scale efficiency perspective, our findings do not support further consolidation in the Singaporean banking sector. We find mixed evidence of the efficiency characteristics of the acquirers and targets banks. Hence, the findings do not fully support the hypothesis that a more (less) efficient bank becomes the acquirer (target). In most cases, our results further confirm the hypothesis that the acquiring bank’s mean overall efficiency improves (deteriorates) post-merger resulted from the merger with a more (less) efficient bank. Tobit regression model is employed to determine factors affecting bank performance, and the results suggest that bank profitability has a significantly positive impact on bank efficiency, whereas poor loan quality has a significantly negative influence on bank performance.</dc:description>
	<dc:publisher xml:lang="en-US">Master in Management, Faculty of Economics and Business, Universitas Gadjah Mada</dc:publisher>
	<dc:date>2007-01-12</dc:date>
	<dc:type>info:eu-repo/semantics/article</dc:type>
	<dc:type>info:eu-repo/semantics/publishedVersion</dc:type>
	<dc:type xml:lang="en-US">Peer-reviewed Article</dc:type>
	<dc:format>application/pdf</dc:format>
	<dc:identifier>https://journal.ugm.ac.id/gamaijb/article/view/5602</dc:identifier>
	<dc:identifier>10.22146/gamaijb.5602</dc:identifier>
	<dc:source xml:lang="en-US">Gadjah Mada International Journal of Business; Vol 9, No 1 (2007): January - April; 19-39</dc:source>
	<dc:source>2338-7238</dc:source>
	<dc:source>1411-1128</dc:source>
	<dc:language>eng</dc:language>
	<dc:relation>https://journal.ugm.ac.id/gamaijb/article/view/5602/4573</dc:relation>
</oai_dc:dc>