| Summary: | 碩士 === 國立高雄大學 === 經營管理研究所 === 97 === Many industries are characterized by multi-output and some are undesirable or bad; for instance, normal loans are desirable and non-performing loans are undesirable. Undesirable outputs are generally byproducts of production process and satisfy the property of weak disposability. Loans are one of the major outputs provided by a bank, but the loan is a risk output. A bank with more loans does not imply it has a higher efficiency especially if it is associated with sizable NPLs. As Economists reported (Nov. 11, 2000), bad loans in Taiwanese domestic banks rocketed to new highs and a local financial crisis was imminent. Controlling NPL is thus very important for both an individual bank’s performance (McNulty et al., 2001) and an economy’s financial soundness.
This study uses the directional distance function and global Malmquist index to measure the TFP growth of commercial banks in Taiwan for the period 2002-2007 since it employs the global distance function to construct TFP change index. Moreover, it can measure TFP index without problem even though the production is variable returns to scale. We furthermore decompose TFP into three components: Technical change, efficiency change, and scale efficiency change components. Empirical results show that:（1）financial banks significantly outperform non-financial banks in terms of pure technical efficiencies with adjusting risk or without adjusting risk; （2）the TFP upgrading mainly results from efficiency improvement and scale efficiency component, and the contribution of technical change is negative; （3）the TFP and its three components don’t have significant difference between financial and non-financial banks with adjusting risk, Except scale efficiency, the TFP and its three components don’t have significant difference between financial and non-financial banks without adjusting risk; （4）Except scale efficiency, the TFP and its three components don’t have significant difference between new and old banks with adjusting risk or without adjusting risk.
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