EMPIRICAL RESEARCH OF M&A IMPACT ON CHINESE AND AMERICAN COMMERCIAL BANKS’ EFFICIENCY BASED ON DEA METHOD

Abstract

This paper firstly introduces DEA (Data Envelopment Analysis) and its applicability for analyzing commercial banks’ efficiency, and then we apply this method to carry out empirical research on top five American banks and four Chinese banks. We find merger and acquisition (M&A) has greater impact on banking efficiency of Chinese banks than that of American banks. Furthermore, the non-market oriented M&A bring some negative effects to banking efficiency of Chinese banks. M&A usually becomes the burden of the acquiring bank. Finally, we briefly put forward some M&A suggestion for Chinese banking industry to improve the banking efficiency based on the empirical conclusion.
Key words: bank M&A, banking efficiency, Date Envelopment Analysis