An Empirical Research Survey of the Productivity and Efficiency of the Securities Industry

This paper provides a review of the approaches that have been used to evaluate the productivity and efficiency of the securities industry (financial ratios, econometric techniques, data envelopment analysis-DEA, and the estimation of stochastic frontiers). In undertaking this it identifies some of the organisational structure characteristics of securities companies that are associated with high levels of operational efficiency, particularly regarding the impact of regulation, the structure of ownership, and economies of scope and scale. The findings are that from the limited number of studies that have to date been undertaken it appears that the industry does have economies of scale, benefits from deregulation and performs better with foreign and bank ownership.