Financial Conglomeration: Efficiency, Productivity and Strategic Drive

Posted: 7 Jul 2004

See all articles by Claudia Girardone

Claudia Girardone

Essex Business School - University of Essex

Barbara Casu

City University London - Sir John Cass Business School

Abstract

Consolidation in the global banking industry has resulted in the emergence of financial conglomerates that conduct an extensive range of businesses with a group structure. To date, few studies have investigated the performance features of such groups. This study aims to extend the literature by evaluating the cost and profit efficiency and productivity change of Italian financial conglomerates during the 1990s using both parametric and nonparametric approaches. The impact of diversification and growth strategies on cost and profit efficiency is also investigated. The results seem to indicate that Italian banking groups have benefited from a consistent improvement in profit efficiency, while they have not experienced a clear increase in cost efficiency. Indeed, profit efficient banking groups display a high risk-high return profile.

Keywords: Financial conglomerates, cost efficiency, profit efficiency, productivity, diversification strategies

JEL Classification: G21, D2

Suggested Citation

Girardone, Claudia and Casu, Barbara, Financial Conglomeration: Efficiency, Productivity and Strategic Drive. Available at SSRN: https://ssrn.com/abstract=562004

Claudia Girardone (Contact Author)

Essex Business School - University of Essex ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom
+44 1206874156 (Phone)
+44 1206873429 (Fax)

HOME PAGE: http://www.essex.ac.uk/ebs/staff/profile.aspx?ID=1045

Barbara Casu

City University London - Sir John Cass Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

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