An Empirical Study on the Integration of Banking Industry in Taiwan --- An Application of Data Envelopment Analysis

• Main Authors: Yi-Hsiu Chen, 陳怡秀
• Other Authors: Shing-Ko Liang
• Format: Others
• Language: zh-TW
• Published: 2003
• Online Access: http://ndltd.ncl.edu.tw/handle/26379688771687509814

碩士 === 國立交通大學 === 管理科學系 === 91 === Abstract The banking industry is consolidating at an accelerating pace which leads banks in Taiwan have to face the merger problems right now. In this tough time, what and how to do is the most important theme for discussion. And those are the main points which we use the conception of integration to study in this thesis. Although there are many literatures which discuss with merger or integration, they only study the individual efficiency after merging and omit to analyze the effects of merger to the whole banking industry and to find the good way to merger or integration. And these dimensions are all discussed in this research. At the very start, we describe the financial environment and trend around the world and show the evidences to illustrate the coming of merger times and we must do it as soon as possible. Next, based on the conception of economic efficiency, we make use of the Data Envelopment Analysis (DEA) to proceed with this research. On the base of the assumptions in this research, the conception of multi-frontier curves is used to find the beneficial integration and the conception of the maximum improved breadth of efficiency is used to look for the optimal combination in the banking industry. For this construct, there are a number of conclusions as follows after the whole process: 1. Using multi-frontier curves to grade all the samples into 4 grades, it’s easy to find the successful integration between each grade. And the strategy be used to face the integration is also can be analyzed. Among the integrated combinations, to integrate with the efficiency frontier of the first grade has more probability to raise both efficiency of the whole banking industry and integrated individual. Furthermore, the rates can reach 100% if non-efficient unit to integrate with other banks. 2. Using the integration approach after fourteen stages, an optimal combination in banking industry can be found. The optimal combination is not only increases the efficiency of integrated individuals but maximum the efficiency of the whole banking industry. The samples in our research are 48 in the beginning and then reduce to 34 at the end; the original efficiency of the whole banking industry is 0.9521 and then increases to 1. 3. Facing the large-scale trend in the whole world, banks should consider the space to integrate with other financial institutions like insurance company, securities firms and so on to increase the service items and competitions.