Mergers, acquisitions and bank efficiency - An application using the data envelopment analysis in Vietnam

Abstract

Nowadays, merger and acquisition is considered one of the methods that could help Vietnamese companies to strengthen their capacity and enlarge their scope of activities. Especially, in Vietnam’s banking system, M&A have become more and more popular. However, there is lack of empirical research on the efficiency of banks’ M&A activities. With the topic “Merger, acquisition and bank efficiency: An Application using the Data Envelopment Analysis”, this research uses the Data Envelopment Analysis method (DEA) to investigate the bank’s efficiency level and its evolution over M&A period. The overall technical efficiency is measured by CRS method, while the pure technical efficiency is evaluated by VRS method. Empirical results show that the overall technical efficiency and scale efficiency experience an upward trend after being merged. The thesis also provides some recommendations for further researchers to use a combination of parametric and non-parametric methods and evaluate over a longer time period after M&A. Keys words: Merger and Acquisition, Bank efficiency, Data Envelopment Analysis (DEA)