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Journal Articles Annals of Operations Research Year : 2022

The role of bank affiliation in bank efficiency: a fuzzy multi-objective data envelopment analysis approach

Abstract

This paper examines differences in bank efficiency between banks affiliated with single-bank holding companies and those affiliated with multi-bank holding companies by applying a fuzzy multi-objective two-stage data envelopment analysis technique. Using a sample of U.S. commercial banks covering 1994–2018, the results show that banks affiliated with multi-bank holding companies are more efficient than those affiliated with single-bank holding companies, suggesting that the former takes advantage of their parents’ resources to enhance their efficiency, consistent with the internal capital market theory. They also show that banks with a powerful CEO exhibit lower efficiency than others. Moreover, there is an inverted U shape relationship between multi-bank holding company structure and bank efficiency, suggesting the presence of an optimal number of multi-bank holding subsidiaries that maximizes efficiency.

Dates and versions

hal-03699984 , version 1 (20-06-2022)

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Sabri Boubaker, Duc Trung Do, Helmi Hammami, Kim Cuong Ly. The role of bank affiliation in bank efficiency: a fuzzy multi-objective data envelopment analysis approach. Annals of Operations Research, 2022, 311 (2), pp.611-639. ⟨10.1007/s10479-020-03817-z⟩. ⟨hal-03699984⟩
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