The Impact of Financial Crisis on Superannuation Funds Efficiency: Evidence from Australia

23 Pages Posted: 15 Oct 2011

See all articles by Milind Sathye

Milind Sathye

University of Canberra - School of Accounting, Banking and Finance; University of Canberra - School of Business and Government

Date Written: March 15, 2011

Abstract

Though superannuation funds play an important role in any economy little is known about their efficiency as the extant efficiency literature is predominantly confined to banks and insurance companies. This paper analyzes the production efficiency of retail superannuation funds in Australia over the period 2005 to 2009. We obtain estimates of production efficiency using Data Envelopment Analysis and regress it on contextual variables using Tobit model. We find that fund characteristics like size and proportion of funds invested in non-risk avenues have significant positive association while diversification and financial crisis had a significant negative association with the production efficiency of retail superannuation funds in Australia. The findings are topical as a government appointed major review of superannuation industry is tasked to examine, among others, the efficiency of superannuation funds.

Keywords: Superannuation funds, financial crisis, Australia

JEL Classification: G23, L25

Suggested Citation

Sathye, Milind, The Impact of Financial Crisis on Superannuation Funds Efficiency: Evidence from Australia (March 15, 2011). Available at SSRN: https://ssrn.com/abstract=1944427 or http://dx.doi.org/10.2139/ssrn.1944427

Milind Sathye (Contact Author)

University of Canberra - School of Accounting, Banking and Finance ( email )

Canberra, Australian Capital Territory 2601
Australia

University of Canberra - School of Business and Government

Canberra, ACT 2601
Australia

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