Commercial banks' performance in Taiwan

Abstract

This paper studies the efficiency and productivity growth of commercial banks in Taiwan before and after financial holding corporations' establishment. We employ a Data Envelopment Analysis (DEA) approach to generate efficiency indices as well as Malmquist productivity growth indices for each bank. We chose 15 member banks of financial holding corporations and 24 non-member banks of financial holding corporations as our sample banks. The time period covered is from January 2000 to June 2003. From this study, we found the following results. First, the member banks of financial holding corporations are more efficient than the non-member banks. Second, both member banks and non-member banks of financial holding corporations demonstrate a greater technical progress in the second time period.