| Summary: | 碩士 === 國立臺灣科技大學 === 財務金融研究所 === 105 === In this thesis I have studied the causal relationship between cost efficiency and non-performing loans using DEA models and censored Tobit model. The results have shown that foreign banks are more efficient than domestic banks. Large banks are the most efficient and incur less non-performing loans. There is no significant difference between the efficiency of medium and small banks. Overall the efficiency of the banking system has improved over the period 2000-2015. When controlling for other factors such as bank-specific, macroeconomic and institutional determinants, either separately or together, non-performing loans and cost efficiency has no significant effect on one another. However, non-performing loans level has a strong and significant effect on cost efficiency change. The “skimping” hypothesis is confirmed. Banks skimp on their resources at the expense of accumulating large amount of non-performing loans. The results also favor the “bad luck” and the “moral hazard” hypothesis. Finally, non-performing loans and cost efficiency have a significant relationship with their correlates such as dollarization, banks’ ownership, banks’ size and bonds’ interest rate.
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