The Efficiency of Korean Banking Industry from 1993 to 2005

• Main Authors: Hsieh,Yi-Cheng, 謝宜錚
• Other Authors: Yeh,Yin-Hua
• Format: Others
• Language: zh-TW
• Published: 2007
• Online Access: http://ndltd.ncl.edu.tw/handle/76208517422124831676

碩士 === 輔仁大學 === 金融研究所 === 95 === In recent years, Korean economy has experienced attack from East Asian Financial Crisis and the long period of revolution in its monetary policy. This economic unrest has influenced the economic performance of Korea to undergo stages of recession, hyper growth, and matured growth. This thesis is to study the efficiency of Korean banking industry before and after the East Asian financial crisis and Korean monetary policy revolution. The thesis is supported by a sampling size of 18 Korean banks which had gone through both East Asian financial crisis and changes in Korean monetary policies from year 1993 to 2005 using Data Envelopment Analysis ( i.e. CCR, BCC and Cost efficiency models ) and Dynamic Analysis Model-Malmquist Productivity Index model for estimation. Findings from static analysis include: (1) Average integral efficiency is non-efficient. The non-efficiency is due to pure technical non-efficient during financial crisis and scale non-efficient during the bad-debt from credit cards; (2) Average cost efficiency is non-efficient. The non-efficiency is due to allocation non-efficient during financial crisis and technical non-efficient because of scale non- efficient during the heavy non-performing loan from bad debts. Major finding from dynamic analysis is that total factor productivity change for Korean banks increased because of improving on technological change, but during the financial crisis, the technical efficiency change, pure technical efficiency change and scale efficiency change are decline. Although from the static analysis, the study shows non-efficient for the overall operating efficiency, based on the dynamic analysis, the result proves that total factor productivity change is growing rapidly because of fast improving on technological change. As a result, the implementation of monetary revolution by Korean government has stimulated its economy by boosting the productivity, which also gradually rescued the banking industry to step away from the financial crisis and bad-debt threats. This is a good example for reference of the financial reform in Taiwan.