An enhanced DEA model for decomposition of technical efficiency in banking

Annals of Operations Research

Volumn 214, Issue 1, 2014, Pages 167-185

  Yang, Chih Ching ^a  

^a CENTRAL TAIWAN UNIVERSITY OF SCIENCE AND TECHNOLOGY   (Taiwan)

Author keywords

Banking; Data envelopment analysis; Efficiency decomposition; Technical efficiency

Indexed keywords

EID: 84894308481     PISSN: 02545330     EISSN: 15729338     Source Type: Journal    
DOI: 10.1007/s10479-011-0926-z     Document Type: Article

References (51)

1. Al-Sharkas, A. A., Hassan, M. K., & Lawrence, S. (2008). The impact of mergers and acquisitions on the efficiency of the US banking industry: Further evidence. Journal of Business Finance and Accounting, 35, 50-70.
2. Altunbas, Y., Liu, M., Molyneux, P., & Seth, R. (2000). Efficiency and risk in Japanese banking. Journal of Banking and Finance, 24, 1605-1628.
3. Ataullah, A., Cockerill, T., & Le, H. (2004). Financial liberalization and bank efficiency: A comparative analysis of India and Pakistan. Applied Economics, 36, 1915-1924.
4. Avkiran, N. K. (1999). The evidence on efficiency gains: The role of mergers and the benefits to the public. Journal of Banking and Finance, 23, 991-1013.
5. Avkiran, N. K. (2009). Opening the black box of efficiency analysis: An illustration with UAE banks. Omega-The International Journal of Management Science, 37, 930-941.
6. Banker, R. D., Charnes, A., & Cooper, W. W. (1984). Some models for estimating technical and scale efficiencies in data envelopment analysis. Management Science, 30, 1078-1092.
7. Berg, S. A., Forsund, F. R., & Jansen, E. S. (1992). Malmquist indices of productivity growth during the deregulation of Norwegian banking, 1980-89. The Scandinavian Journal of Economics, 94(Suppl.), 211-228.
8. Bergendahl, G. (1998). DEA and benchmarks-an application to Nordic banks. Annals of Operation Research, 82, 233-249.
9. Berger, A. N., & Humphrey, D. B. (1992). Measurement and efficiency issues in commercial banking. In Z. Griliches (Ed.), Output measurement in the service industry (pp. 245-296). Chicago: University of Chicago Press and National Bureau of Economic Research.
10. Berger, A. N., & Humphrey, D. B. (1997). Efficiency of financial institutions: International survey and directions for future research. European Journal of Operational Research, 98, 175-212.
11. Castelli, L., Pesenti, R., & Ukovich, W. (2010). A classification of DEA models when the internal structure of the Decision Making Units is considered. Annals of Operation Research, 173, 207-235.
12. Chambers, R. G., Chung, Y., & Färe, R. (1996). Benefit and distance functions. Journal of Economic Theory, 70, 407-419.
13. Chang, T. C., & Chiu, Y. H. (2006). Affecting factors on risk-adjusted efficiency in Taiwan's banking industry. Contemporary Economic Policy, 24, 634-648.
14. Chao, C. M., Yu, M. M., & Chen, M. C. (2010). Measuring the performance of financial holding companies. The Service Industries Journal, 30, 811-829.
15. Charnes, A., & Cooper, W. W. (1962). Programming with linear fractional functions. Naval Research Logistics Quarterly, 9, 181-185.
16. Charnes, A., Cooper, W. W., & Rhodes, E. (1978). Measuring the efficiency of decision making units. European Journal of Operations Research, 6, 429-444.
17. Chen, X., Skully, M., & Brown, K. (2005). Banking efficiency in China: Application of DEA to pre- and post-deregulation eras: 1993-2000. China Economic Review, 16, 229-245.
18. Copeland, T. E., Weston, J. F., & Shastri, K. (2005). Financial theory and corporate policy (4th ed.). Boston: Pearson Addison Wesley.
19. Dismuke, C. E., & Sena, V. (2001). Is there a trade-off between quality and productivity? The case of diagnostic technologies in Portugal. Annals of Operation Research, 107, 101-116.
20. Drake, M., & Hall, M. J. B. (2003). Efficiency in Japanese banking: An empirical analysis. Journal of Banking and Finance, 27, 891-917.
21. Emrouznejad, A., & Anouze, A. L. (2010). Data envelopment analysis with classification and regression tree-a case of banking efficiency. Expert Systems, 27, 231-246.
22. Färe, R., Grosskopf, S., Lovell, C. A. K., & Pasurka, C. (1989). Multilateral productivity comparisons when some outputs are undesirable: a nonparametric approach. Review of Economics and Statistics, 71, 90-98.
23. Färe, R., Grosskopf, S., & Weber, W. L. (2004). The effect of risk-based capital requirements on profit efficiency in banking. Applied Economics, 36, 1731-1743.
24. Farrell, M. J. (1957). The measurement of productive efficiency. Journal of the Royal Statistical Society Series A, 129, 253-351.
25. Fethi, M. D., & Pasiouras, F. (2010). Assessing bank efficiency and performance with operational research and artificial intelligence techniques: A survey. European Journal of Operational Research, 204, 189-198.
26. Fukuyama, H., & Weber, W. L. (2008). Japanese banking inefficiency and shadow pricing. Mathematical and Computer Modelling, 48, 1854-1867.
27. Fukuyama, H., & Weber, W. L. (2010). A slacks-based inefficiency measure for a two-stage system with bad outputs. Omega-The International Journal of Management Science, 38, 398-409.
28. Gilbert, R. A., & Wilson, P. W. (1998). Effects of deregulation on the productivity of Korean banks. Journal of Economics and Business, 50, 133-155.
29. Gugler, K., Mueller, D. C., Yurtoglu, B. B., & Zulehner, C. (2003). The effects of mergers: An international comparison. International Journal of Industrial Organization, 21, 625-653.
30. Hahn, F. R. (2007). Domestic mergers in the Austrian banking sector: A performance analysis. Applied Financial Economics, 17, 185-196.
31. Hsiao, H. C., Chang, H. H., Cianci, A. M., & Huang, L. H. (2010). First financial restructuring and operating efficiency: evidence from Taiwanese commercial banks. Journal of Banking and Finance, 34, 1461-1471.
32. Huang, L. H., Hsiao, H. C., Cheng, M. A., & Chang, S. J. (2008). Effects of financial reform on productivity change. Industrial Management and Data Systems, 108, 867-886.
33. Hughes, J. P., & Mester, L. J. (1993). A quality and risk-adjusted cost function for banks: Evidence on the 'too-big-to-fail' doctrine. Journal of Productivity Analysis, 4, 293-315.
34. Hughes, J. P. (1999). Measuring efficiency when competitive prices aggregate differences in product quality and risk. Research in Economics, 53, 47-76.
35. Isik, I., & Hassan, M. K. (2003). Financial deregulation and total factor productivity change: An empirical study of Turkish commercial banks. Journal of Banking and Finance, 27, 1455-1485.
36. Kohers, T., Huang, M. H., & Kohers, N. (2000). Market perception of efficiency in bank holding company mergers: The roles of the DEA and SFA models in capturing merger potential. Review of Financial Economics, 9, 101-120.
37. Kumbhakar, S. C., & Lozano-Vivas, A. (2005). Deregulation and productivity: The case of Spanish banks. Journal of Regulatory Economics, 27, 331-351.
38. Liu, W. B., Meng, W., Li, X. X., & Zhang, D. Q. (2010). DEA models with undesirable inputs and outputs. Annals of Operation Research, 173, 177-194.
39. Lovell, C. A. K., Pastor, J. T., & Turner, J. A. (1995). Measuring macroeconomic performance in the OECD: a comparison of European and non-European countries. European Journal of Operational Research, 87, 507-518.
40. McAllister, P. H., & McManus, D. A. (1993). Resolving the scale efficiency puzzle in banking. Journal of Banking and Finance, 17, 389-405.
41. Park, K. H., & Weber, W. L. (2006). A note on efficiency and productivity growth in the Korean Banking Industry, 1992-2002. Journal of Banking and Finance, 30, 2371-2386.
42. Pasiouras, F., Liadaki, A., & Zopounidis, C. (2008). Bank efficiency and share performance: Evidence from Greece. Applied Financial Economics, 18, 1121-1130.
43. Pastor, J. M. (1999). Efficiency and risk management in Spanish banking: A method to decompose risk. Applied Financial Economics, 9, 371-384.
44. Pastor, J. M. (2002). Credit risk and efficiency in the European banking system: A three-stage analysis. Applied Financial Economics, 12, 895-911.
45. Pastor, J. T., Lovell, C. A. K., & Tulkens, H. (2006). Evaluating the financial performance of bank branches. Annals of Operation Research, 145, 321-337.
46. Sealey, C. W., & Lindley, J. T. (1977). Inputs, outputs and theory of production cost at depository financial institutions. Journal of Finance, 32, 1251-1266.
47. Seiford, L. M., & Zhu, J. (2002). Modeling undesirable factors in efficiency evaluation. European Journal of Operational Research, 142, 16-20.
48. Sherman, H. D., & Zhu, J. (2006). Benchmarking with quality-adjusted DEA (Q-DEA) to seek lower-cost high-quality service: Evidence from a U. S. bank application. Annals of Operation Research, 145, 301-319.
49. Shephard, R. W. (1970). Theory of cost and production functions. Princeton: Princeton University Press.
50. Tone, K. (2001). A slacks-based measure of efficiency in data envelopment analysis. European Journal of Operational Research, 130, 498-509.
51. Tsionas, E. G., Lolos, S. E. G., & Christopoulos, D. K. (2003). The performance of the Greek banking system in view of the EMU: Results from a non-parametric approach. Economic Modelling, 20, 571-592.