| Summary: | 碩士 === 國立暨南國際大學 === 國際企業學系 === 91 === The ratios of non-performing loans (NPLs) in Taiwanese domestic banks have been steadily increased in recent years. Economist also reported (Nov. 11, 2000) that a local financial crisis is immediate. Hence, the NPL is one of the major factors to measure bank’s efficiency. Furthermore, conventional DEA models assume that the production possibility set is convex. However, domestic banks and foreign-owned banks apparently belong to differently operating systems. Hence, the assumption of convexity may not be valid. We extend the input oriented BCC model, which is invariant under the translation of undesirable outputs (NPLs), to simultaneously measure the efficiency of banks, belonging different systems.
The sample consists of 35 foreign-owned banks and 48 domestic banks of Taiwan during 1999-2001. Empirical results show: (1) The efficient frontiers of domestic commercial banks and foreign-owned banks in Taiwan are significantly different; (2) Domestic banks significantly outperformed foreign-owned banks in terms of technical efficiencies; (3) Some of domestic banks are enveloped by foreign-owned banks, while domestic banks could not be the elements of the peer group to the foreign-owned banks; (4) foreign-owned banks compared to domestic banks are more successful to diversify their revenues.
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