A Study on the Operational Efficiency of Taiwan Banking Industry with Risk and Corporate Governance Considerations：An Application of DEA Approach

• Main Authors: MingChih,Tsai, 蔡明志
• Other Authors: Liu Xiang Xi
• Format: Others
• Language: zh-TW
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/34468261761153096390

碩士 === 國立臺北大學 === 企業管理學系 === 96 === The bank often has business risks such as operational, credit and market which affect its efficiency. Many countries usually take corporate governance into consideration to control the bank risk and performance improvement. Thus, to consider both the business risks and corporate governance can deepen and reflect the overall risk on the actual result of the performance. Further more, in the study of risks on banking efficiency, it is rare to adopt corporate governance to see the effect of performance, therefore, the study of taking it into consideration will be a lesson worth further discussing. Regarding the assessment of risk and corporate governance, risk factors adoption is a main method to assess the efficiency, it mainly utilize the overdue loan ratio of or take the risky assets as the variable to discusses its influence on the banking performance. However, the bank risks does not only exist in its characteristic of business, i.e. the bank itself may be regarded as a machine of risk management; in further aspect, the factors of corporate governance for the bank are more important since the banks are of public interest. But the studies on the factors of risks only emphasized on the bank risks and took only overdue loan and risky assets but corporate governance into consideration. This study tries to add the corporate governance as factors, and consider the role of shareholder and information transparency. We take the percentage of insider ownership and DLR as the replaced variables, so that the structure of stock equity and financial transparency are indexes that easier to be quantized, it is easier to observe its risks as well. Owing to that bank is an industry of multi-inputs and multi-outputs, in this paper, we adopt DEA method to estimate bank efficiency based on the information obtained from 35 banks in Taiwan for the period of 2003 to 2006. We also employ both factors of risk and corporate governance to evaluate the influences on banking performances. For local banks, overdue loans represent the risks of business, and the limitation on BIS ratio is to raise the liquidity. How to reduce the issues on the corporate governance by requiring the supervision aggressively are the approaches to reduce and control the bank risks aside from the consideration of market and credit risks. However, by comparing the factors of that (1) excluding risks and corporate governance,(2)employing the risk factors as input, (3)employing the risk factors as outputs ,(4)employing both risk and corporate governance as inputs,(5)employing both risk and corporate governance as outputs,we find that employing both risk and corporate governance as inputs could raise the efficiency. Meanwhile, the advanced control of taking both risk and corporate governance as inputs leaves more rooms to improve the efficiency for bank management level. This empirical result could also provide banking industry to improve its strategies of risk management and some advices to related policy makers.