Bank efficiency and share performance: evidence from Greece

Fotios Pasiouras, Aggeliki Liadaki, Constantin Zopounidis

Research output: Contribution to journalArticlepeer-review

58 Citations (SciVal)


This article examines for the first time the association between the efficiency of Greek banks and their share price performance. Our analysis consists of three parts. First, we calculate the annual share price returns of the banks for each year between 2001 and 2005. Then we use data envelopment analysis to estimate the efficiency of the banks between 2000 and 2005. Finally, we regress the annual share price returns over the annual change of efficiency while controlling for changes in banks' size and risk. We find that the average technical efficiency under constant returns to scale is 0.931 and increases to 0.977 under variable returns to scale, resulting in a scale efficiency of 0.953. The regression results indicate a positive and statistically significant relationship between annual changes in technical efficiency and stock returns, while changes in scale efficiency have no impact on stock returns.
Original languageEnglish
Pages (from-to)1121-1130
Number of pages10
JournalApplied Financial Economics
Issue number14
Publication statusPublished - 2008


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