An integrated performance evaluation of financial holding companies in Taiwan

Shih-Fang Lo and Wen-Min Lu

European Journal of Operational Research, 2009, vol. 198, issue 1, 341-350

Abstract: There has been a worldwide trend for financial institutions to become larger in scale and more diversified in scope, with Taiwan being no exception. Fourteen financial holding companies (FHCs) have each begun to function as a management umbrella in Taiwan by investing in different types of financial services such as banking, insurance, and securities. This paper focuses on this local financing issue from an integrated methodological perspective by model innovations proposed in several earlier studies. For example, the efficiency of profitability and marketability are combined to evaluate the FHCs' performance. To conduct a valid and reliable evaluation process while applying the FHC's case in Taiwan, we integrate the slacks-based measure (SBM) and slacks-based measure of super efficiency (super-SBM) models in order to directly handle the slacks and identify the best performers. A new scheme that deals with the negative output data in the SBM/super-SBM is also introduced. Inter-temporal efficiency change, which is decomposed into 'catch-up' and 'frontier-shift' effects, is analyzed by means of the SBM-based Malmquist index. A decision-making matrix is also presented to help the FHCs' managerial authorities position themselves in the industry. The above techniques show with a high degree of consistency that large-sized FHCs perform better than small-sized ones.

Keywords: FHCs; Data; envelopment; analysis; Efficiency; Slacks; Slacks-based; measure; Super; efficiency; Malmquist; index; Negative; output; data (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (30)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0377-2217(08)00750-9
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:198:y:2009:i:1:p:341-350

Access Statistics for this article

European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati

More articles in European Journal of Operational Research from Elsevier
Bibliographic data for series maintained by Catherine Liu ().