| Summary: | 博士 === 國立臺北科技大學 === 管理學院管理博士班 === 105 === Over the past two decades, the banking industry in Taiwan has experienced two financial reforms and mergers. The organizational structure of banks has undergone a major change. In pursuit of profit from financial market globalization, the government of Taiwan required all listed banks to follow the International Financial Reporting Standards (IFRs) for the compilation of their financial reports from January 1, 2013. This study provided an in-depth analysis of the impact of the introduction of the Financial Holding Company Law and IRFSs on the operating performance of Taiwanese commercial banks. The issue was examined in two phases. In the first phase, financial data from the year (2012) preceding the introduction of IFRSs were used and Network Data Envelopment Analysis (DEA) based on slack variables was applied to examine the impact of IFRSs on bank performance. Bank production process was divided into two stages to measure the banks’ profitability efficiency, marketability efficiency, and overall efficiency in order to investigate the effect of IFRSs on operational performance of Taiwanese commercial banks. The second phase was divided into two steps. Financial data from the year of the official implementation of IFRSs (2013) were examined. A non-convex meta-frontier NDEA model and convex meta-frontier network NDEA model were applied to evaluate the profitability efficiency and marketability efficiencyof financial and non-financial holding banks. As the first step in this phase, a non-convex production possibility set was established for each bank. Thus, a non-convex DEA model was used to divide Taiwanese commercial banks with different organizational structures into two groups: commercial banks owned by financial holding companies (hereinafter, financial holding commercial banks) and commercial banks not owned by financial holding companies (hereinafter, non-financial holding commercial banks). The profitability efficiency and marketability efficiencyof each bank in each group was measured individually. Banks were ranked based on their operational efficiency in order to examine the effect of IFRSs on the operation of commercial banks with different organizational structures. As the second step in the second phase, a convex production possibility set was established for each bank. Thus, a convex NDEA model was used to evaluate the profitability efficiency and marketability efficiency of commercial banks in two groups. The assumption that the banks’ production possibility set is convex meant that the convex meta-frontier model was more suitable for the evaluation of banks with organizational differences than the non-convex meta-frontier model. Profitability efficiency and marketability efficiency were measured in this study using the convex meta-frontier model. The inefficiency factors of each inefficient banks were further divided into management inefficiencies and technical inefficiencies in order to obtain a better understanding of reasons for bank inefficiency and provide inefficient banks with effective management strategies that would improve their operational efficiency.
The empirical results of the first phase are summarized as follows: (1) The Results of the Wilcoxon signed-rank test revealed a significant difference between the efficiency values of the two accounting systems, indicating that bank financial reporting was affected by the replacement of accounting standards in Taiwanese commercial banks by IFRSs and the use of accounting methods and financial assets at fair value. The banks’ operational efficiency, which was based on the use of financial data as a measurement variable, changed significantly. (2) Each bank uses different operating and accounting strategies. The effect of IFRSs on efficiency values and relative ranking varied from bank to bank. The empirical results obtained from the first step in the second phase can be summarized as follows: financial holding commercial banks had a better profitability ability than non-financial holding commercial banks. However, their performance was poorer in terms of the marketability efficiencycreated by investment resources. Based on the above, the global business model and multi-perspective organizational patterns used in financial holding banks are expected to have a profitability advantage in new financial and accounting environments in future. However, multi-perspective organizational structures can reduce stock value. This study used the non-convex DEA model to analyze efficiency improvement in inefficient banks: (1) inefficient banks can improve their operational efficiency in both stages by referring to the business strategies of the banks in either of the two groups. The empirical results indicated profitability efficiency and marketability efficiencyof most financial-holding banks, which constituted the reference group. Financial holding banks were a reference group for most non-financial holding banks with regard to their profitability efficiency. Nevertheless, non-financial holding banks were a reference group for all non-financial holding banks. (2) With regard to input-oriented profitability efficiency, inefficient banks can improve their accounting strategies and reduce input items in order to increase their profitability efficiency. With regard to the output-oriented market value efficiency, the banks can increase the market value of their stock, for instance, the price/earnings (P/E) ratio and price-to-book (P/B) ratio. The empirical results obtained from the second step in the second phase can be summarized as follows: financial holding banks had higher profitability efficiency than non-financial holding banks. However, the marketability efficiencyof non-financial holding banks was higher than that of financial holding banks. These results corresponded to the non-convex DEA results in the first step of the second phase. Thus, according to the meta-frontier model, after the implementation of the Financial Holding Company Law, commercial banks owned by financial holding companies performed better than other banks in terms of multi-perspective business profit efficiency. However, their marketability efficiencydecreased due to a reduction in the value of the overall organization. In this step, efficiency gaps were further analyzed based on the profitability efficiency and marketability efficiency of financial and non-financial holding banks. Inefficiency factors were divided into management inefficiencies and technical inefficiencies. The matrix analysis was applied to determine strategies that could enhance the business performance of inefficient banks.
This study provides empirical results that authorities may refer to for the formulation of new financial regulations that are in line with the new guidelines, under which IFRS-compliant financial reports will be prepared from 2013 onward when financial holding banks will be formed in Taiwan via financial mergers. The results can also serve as a reference for the bank management that are reviewing IFRS-compliant financial reporting and allow them to adjust their business strategies, asset allocation, and accounting strategies in order to improve their business performance under the new standards and their competitiveness in the new financial environment. Investors can refer to the empirical results reported in this study when making investment decisions under the new standards.
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