The impact of bank merger on the efficiency of the banking industry in Iran(2003-2012)
Journal Title: International Research Journal of Applied and Basic Sciences - Year 2015, Vol 9, Issue 6
Abstract
The purpose of this paper is to examine the effect of bank merger on the effeciency of the banking industry in Iran and studies the predicted impact of mergers on total costs.For this purpose, we selected Melat Bank and Tejarat Bank with the most assets in between Iranian banks and simulate merger between a pair of banks .This paper uses translog cost function and SUR metod to estimate potential effect mergers on total costs of banks which were merged hypothetically.Merger simulation are carried out hypothetically, we assume no premium or merger costs and no further synergies resulting from such things as branch closure or restructuring of the product mix. increasing scale is result of bank mergers. thereforeUsingthese results, the economies of scale effects will be determined on costs reduction post merger. financial data imply that costs could potentially be reduced,cost-efficient mergers are apparently a result of existance of scale economies.
Authors and Affiliations
Saeid Eisazadeh| Associate Professor, Department of Economic,Facultyof Economic and Social Sciences,Bu-Ali SinaUniversity, email: Saeed_Isazadeh@yahoo.com, Maryam Mazhary Ava| Master of Economic, Department of Economic,Facultyof Economic and Social Sciences,Bu-Ali SinaUniversity
Keywords
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