Journal of Economics and International Finance
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Article Number - 53B522262661


Vol.9(2), pp. 12-18 , February 2017
DOI: 10.5897/JEIF2016.0805
ISSN: 2006-9812



Full Length Research Paper

Bank efficiency and stock returns



David Sarpong*
  • David Sarpong*
  • Accountancy Department, Accra Polytechnic, Ghana.
  • Google Scholar
Ernest Christian Winful
  • Ernest Christian Winful
  • Accountancy Department, Accra Polytechnic, Ghana.
  • Google Scholar
Jones Ntiamoah
  • Jones Ntiamoah
  • Accountancy Department, Accra Polytechnic, Ghana.
  • Google Scholar







 Received: 06 January 2016  Accepted: 30 August 2016  Published: 28 February 2017

Copyright © 2017 Author(s) retain the copyright of this article.
This article is published under the terms of the Creative Commons Attribution License 4.0


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 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.

Key words: Efficiency, share price changes, Stochastic Frontier Approach (SFA), data envelopment analysis (DEA).

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APA Sarpong, D., Winful, E. C., & Ntiamoah, J. (2017). Bank efficiency and stock returns. Journal of Economics and International Finance, 9(2), 12-18.
Chicago David Sarpong, Ernest Christian Winful and Jones Ntiamoah. "Bank efficiency and stock returns." Journal of Economics and International Finance 9, no. 2 (2017): 12-18.
MLA David Sarpong, Ernest Christian Winful and Jones Ntiamoah. "Bank efficiency and stock returns." Journal of Economics and International Finance 9.2 (2017): 12-18.
   
DOI 10.5897/JEIF2016.0805
URL http://academicjournals.org/journal/JEIF/article-abstract/53B522262661

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