Efficiency of Listed Banks Operations and Stock Price Movements
Banks' efficiency is linked to stock performance; literature from Ghana on the subject is that most banks are inefficient. What is not clear is whether this inefficiency translates into affecting stock price movements. Therefore, the study examines the effect of efficiency of listed banks oper...
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| Format: | Article |
| Language: | English |
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EconJournals
2020-01-01
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| Series: | International Journal of Economics and Financial Issues |
| Online Access: | https://www.econjournals.com/index.php/ijefi/article/view/8392 |
| _version_ | 1797911449192890368 |
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| author | Joseph Kwadwo Tuffour Kenneth Ofori-Boateng Williams Ohemeng |
| author_facet | Joseph Kwadwo Tuffour Kenneth Ofori-Boateng Williams Ohemeng |
| author_sort | Joseph Kwadwo Tuffour |
| collection | DOAJ |
| description |
Banks' efficiency is linked to stock performance; literature from Ghana on the subject is that most banks are inefficient. What is not clear is whether this inefficiency translates into affecting stock price movements. Therefore, the study examines the effect of efficiency of listed banks operations on stock price movements in Ghana utilizing annual data from 2013-2017 for five banks. The banks' input and output variables were used to estimate the efficiency scores, within the Data Envelopment techniques. The results reveal that, the input and output variables accounted for about 80.5% of the banks' profitability and 92.5% of the banks' cost. The results indicated that, changes in profit efficiency have a significant positive impact on stock returns. However, a significant but negative effect of cost efficiency on stock returns was found. Thus, policy makers should encourage banks to operate efficiently in order to make effective capital allocation decisions.
Keywords: Banks Efficiency, Stock Price Movements, Data Envelopment Analysis
JEL Classifications: C23, G14, G21, G32
DOI: https://doi.org/10.32479/ijefi.8392
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| first_indexed | 2024-04-10T11:40:49Z |
| format | Article |
| id | doaj.art-66e9656a3d4442e49282419ec575ae7c |
| institution | Directory Open Access Journal |
| issn | 2146-4138 |
| language | English |
| last_indexed | 2024-04-10T11:40:49Z |
| publishDate | 2020-01-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Economics and Financial Issues |
| spelling | doaj.art-66e9656a3d4442e49282419ec575ae7c2023-02-15T16:17:33ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382020-01-011014368Efficiency of Listed Banks Operations and Stock Price MovementsJoseph Kwadwo Tuffour0Kenneth Ofori-Boateng1Williams Ohemeng2University of Professional Studies, AccraGhana Institute of Management and Public AdministrationGhana Institute of Management and Public Administration Banks' efficiency is linked to stock performance; literature from Ghana on the subject is that most banks are inefficient. What is not clear is whether this inefficiency translates into affecting stock price movements. Therefore, the study examines the effect of efficiency of listed banks operations on stock price movements in Ghana utilizing annual data from 2013-2017 for five banks. The banks' input and output variables were used to estimate the efficiency scores, within the Data Envelopment techniques. The results reveal that, the input and output variables accounted for about 80.5% of the banks' profitability and 92.5% of the banks' cost. The results indicated that, changes in profit efficiency have a significant positive impact on stock returns. However, a significant but negative effect of cost efficiency on stock returns was found. Thus, policy makers should encourage banks to operate efficiently in order to make effective capital allocation decisions. Keywords: Banks Efficiency, Stock Price Movements, Data Envelopment Analysis JEL Classifications: C23, G14, G21, G32 DOI: https://doi.org/10.32479/ijefi.8392 https://www.econjournals.com/index.php/ijefi/article/view/8392 |
| spellingShingle | Joseph Kwadwo Tuffour Kenneth Ofori-Boateng Williams Ohemeng Efficiency of Listed Banks Operations and Stock Price Movements International Journal of Economics and Financial Issues |
| title | Efficiency of Listed Banks Operations and Stock Price Movements |
| title_full | Efficiency of Listed Banks Operations and Stock Price Movements |
| title_fullStr | Efficiency of Listed Banks Operations and Stock Price Movements |
| title_full_unstemmed | Efficiency of Listed Banks Operations and Stock Price Movements |
| title_short | Efficiency of Listed Banks Operations and Stock Price Movements |
| title_sort | efficiency of listed banks operations and stock price movements |
| url | https://www.econjournals.com/index.php/ijefi/article/view/8392 |
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