Managerial Cost Inefficiency and Takeovers of U.S. Thrifts

20 Pages Posted: 1 Jul 2015

See all articles by Fatma Cebenoyan

Fatma Cebenoyan

City University of New York, CUNY Hunter College - Department of Economics

A. Sinan Cebenoyan

Hofstra University - Frank G. Zarb School of Business; New York University (NYU) - Department of Finance

Elizabeth S. Cooperman

University of Colorado Denver

Date Written: June 30, 2015

Abstract

This paper uses a two-step methodology to examine the relationship between managerial cost inefficiency and the takeover of U.S. thrifts during a period of market liberalization and widespread takeover activity, 1994 to 2000. In the first stage using stochastic cost frontiers, controllable managerial cost inefficiency scores are estimated for all stock firms operating each year in 1994 to 2000. In a second stage, these scores are used to examine correlates of takeovers, focusing on cost inefficiency. For takeovers by banks, a significant negative relationship between cost inefficiency and takeover is found, suggesting an exit of more cost efficient firms from the thrift industry during this period. However, takeovers by thrifts are associated with other characteristics.

Keywords: depository institutions, thrifts, takeovers and cost inefficiency

JEL Classification: G21, G33, G34

Suggested Citation

Cebenoyan, Fatma and Cebenoyan, Ahmet Sinan and Cooperman, Elizabeth S., Managerial Cost Inefficiency and Takeovers of U.S. Thrifts (June 30, 2015). Multinational Finance Journal, Vol. 9, No. 1/2, p. 23-42, 2005, Available at SSRN: https://ssrn.com/abstract=2625081

Fatma Cebenoyan (Contact Author)

City University of New York, CUNY Hunter College - Department of Economics ( email )

695 Park Avenue
New York, NY 10021
United States

Ahmet Sinan Cebenoyan

Hofstra University - Frank G. Zarb School of Business ( email )

Dept. of Finance
Hempstead, NY 11549
United States
516-463-5702 (Phone)

New York University (NYU) - Department of Finance ( email )

Stern School of Business
44 West 4th Street
New York, NY 10012-1126
United States

Elizabeth S. Cooperman

University of Colorado Denver ( email )

Campus Box 165, P.O. Box 173364
Denver, CO 80217
United States
303-315-8422 (Phone)
303-315-8084 (Fax)

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