Directional distance function DEA estimators for evaluating efficiency gains from possible mergers and acquisitions

A modified generalised directional distance function data envelopment analysis model is introduced into the smoothed bootstrap context. The new handles asymmetrically desirable and undesirable outputs deals with positive negative values, while bias-corrected estimators are independent of length direction vector. reason for development this efficiency assessment estimation degree operating gains from possible mergers acquisitions (M&A) between banks. Our estimations regarded as more realistic compared to those found in extant literature, they consider not only but also variables values that crucial evaluation firm performance. applicable banking sector any industry. We use two samples, one consisting 86 conventional a second 21 Islamic Among findings study convergence banks’ efficiencies over period 2014–2016. Moreover, consolidations efficient inefficient banks lead higher efficiency, M&A or likely be undesirable.