Abstract

Financial institutions have become larger and engage in a wider array of financial activities due to continuing consolidation. Since the financial holding companies face multiple production functions simultaneously, the traditional data envelopment analysis (DEA) approach is not suitable for investigating their efficiency. This study applies the multi-activity DEA model to explore the relative efficiency of 12 financial holding companies in Taiwan. The results show that the multi-activity DEA model is obviously more capable of identifying sources of inefficiency, thereby potentially yielding greater managerial insights into organisational improvements.

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