The study on the relative management efficiency of the commercial banks in Taiwan

• Main Authors: Chen kuang chung, 陳光鐘
• Other Authors: 丘邦翰
• Format: Others
• Language: zh-TW
• Published: 2011
• Online Access: http://ndltd.ncl.edu.tw/handle/45415585995336395585

碩士 === 元智大學 === 經營管理碩士在職專班 === 99 === In 10th April 1990, the “Standards Governing of the Establishment of Commercial Banks” was announced by government. The establishment of new banks has resulted in fierce competition and high challenge in banking industry. Since Taiwan joined the World Trade Organization (WTO) in 2002 and the implementation of New Basel Accord, the development of financial market has been moving toward internationalization and liberalization. Hence, the loose financial policy has created difficulty in identifying the differences among banks, securities and insurance companies. Besides, the cross-industrial cooperation, the collective management and the large-scale development have been regarded as competitive advantages for financial institutions to compete with their competitors. The aim of this research is to study the management efficiency of the commercial banks in Taiwan. In this fierce competitive environment, some banks will be forced to exit the market due to inefficiency management. To maintain competitiveness, the banks in Taiwan must evaluate their management efficiencies and propose alternate strategies for improvement. In 2001, professor Huang Da Ye has proposed different evaluation methods of management efficiency to banks including (1) economy of scale (2) economy of scope (3) profit function (4) efficiency frontier, which can also be concluded into the parameter estimation, the financial index analysis and the non-parameter estimation. Among them, the efficiency frontier is the non-parameter estimation while the data envelopment analysis (DEA) is one of the non-parameter estimations. This method does not estimate a function but calculates the efficiency frontier by mathematical programming. Its concept is based on Pareto optimality. More importantly, the DEA can provide an overall or a single efficiency evaluation index, differentiate the relative efficiency and order between the evaluations units, and is not affected by quantities of measurement. As a result, it is an appropriate method to study the management efficiency of banks. In recent years, the data envelopment analysis has been widely applied to the management in many fields because it is able to analyze the efficiency of various input and output, which can be taken as references for the administrators. Through the data collection process, the completeness of data given by “Taiwan Economic Journal Data Bank” was somewhat limited. This research targeted on 18 commercial banks in Taiwan including Hwa Nan Commercial Bank between 2005 and 2006 to conduct an empirical analysis on the evaluation units’ total efficiency, total technical efficiency, pure technical efficiency, allocative efficiency, return to scale and difference variable. The findings of research can clearly evaluate each commercial bank’s relative efficiency of input and output and give direction and scope for the input or output items that required improvement to be taken as references for future development.