Operational Efficiency of the Banks n Taiwan Before and After cceding to the Financial Holding Companies
Date Issued
2008
Date
2008
Author(s)
Chang, Yung-Ching
Abstract
This study adopte Data Envelopment Analysis method (DEA) and Malmquist productivity index (MPI) to evaluate 12 over-the-counter financial holding companies operational efficiency and cross-period growth rate of branch bank of after joining financial holding companies in Taiwan. The input variables cover capital stock, operational fees, customers’ deposits and output variables include volume of sale, total assests and net profit during the period 1997 to 2007. In this study, five efficieny indexes are measured that include global efficiency analysis, pure technique efficiency analysis, scale efficiency analysis, slack variable analysis, and Malmquist index analysis. he major results of this study cover: . Three banks, Hua Nan bank, China Development Industrial bank, and Mega International Commercial bank all attain global efficiency and did’t impact their efficiency every year after joining financial holding companies. However, Taishin bank has significant improvement and Fubon bank and the Cathay United bank have a worse outcome after joining financial holding companies.. The bank don’t attain the global efficiency is because of their lack of scale unefficiency.. The branch bank don’t attain the scale efficiency, largely fall into increasing return to scale which meant that the domestic bank on a scale is still small and can not utilize cross marketing to reduces their operation cost in resource distribution.. Numerous branch banks had significant increase total factor productivity after joining financial holding companies, but a significant decrease in their average total factor productivity before joining financial holding companies.. Under Malmquist productivity index, we found that a large part of change of total factor productivity arose from the technical change. Therefore, the technical progress can significantly contribute to growth to the total factor productivity of branch banks.
Subjects
Data Envelopment Analysis
Malmquist productivity index
operational efficiency
financial holding company
bank
Type
thesis
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