The Study of Capital Adequacy on the Cost Efficiency of Banks in Taiwan-Application of the Three-stage DEA

• Main Authors: YA TING TSAO, 曹雅珽
• Other Authors: JUN YEN LEE
• Format: Others
• Language: zh-TW
• Published: 2005
• Online Access: http://ndltd.ncl.edu.tw/handle/31269756298566163434

博士 === 國立嘉義大學 === 管理研究所 === 93 === The financial market is quite competitive in recent years. This study measures the cost efficiency of Taiwan banks in the intensive and competitive market. By adjusting risk variables (credit and market risk) on input slacks, this study applied the three-stage DEA proposed by Fried et al. (2002) to measure and compare the difference of cost efficiency among 44 Taiwan banks in 2002. As results, this study shows that after the adjustment of capital adequacy, the financial holding corporations are obviously different from the general banks in technical efficiency, allocative efficiency and cost efficiency. It indicates that the financial holding corporations have a good capital adequacy as facing the uncertain environment. Also, the more accurate efficiency scores (0.458) are obtained after adjusting risk is applied in cost efficiency measurement. Therefore, using the three-stage DEA can objectively and correctly measure bank’s cost efficiency.