Australian banks' efficiency improvements lead to higher stock returns.
The article looks at how efficient Australian banks were from 1995 to 2002. They found that big banks got better at managing costs and making profits, while smaller banks struggled with profit efficiency. The study used Data Envelopment Analysis to compare different banks. The results show that technological changes helped banks improve productivity. Interestingly, the study also found that changes in bank efficiency were linked to stock returns.