Resumen
Banks? efficiency is linked to stock performance; literature from Ghana on the subject is that most banks are inefficient. What is not clear is whether this inefficiency translates into affecting stock price movements. Therefore, the study examines the effect of efficiency of listed banks operations on stock price movements in Ghana utilizing annual data from 2013-2017 for five banks. The banks? input and output variables were used to estimate the efficiency scores, within the Data Envelopment techniques. The results reveal that, the input and output variables accounted for about 80.5% of the banks? profitability and 92.5% of the banks? cost. The results indicated that, changes in profit efficiency have a significant positive impact on stock returns. However, a significant but negative effect of cost efficiency on stock returns was found. Thus, policy makers should encourage banks to operate efficiently in order to make effective capital allocation decisions.Keywords: Banks Efficiency, Stock Price Movements, Data Envelopment AnalysisJEL Classifications: C23, G14, G21, G32DOI: https://doi.org/10.32479/ijefi.8392