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USING A THREE STAGE SUPER-SBM MODEL TO ANALYZE THE INFLUENCE OF BANK'S INTERNATIONALIZATION AND RISK ON THE OPERATIONAL EFFICIENCY

Hsiang-Hsi Liu, Chin-Wei Huang, Yung-Ho Chiu and Hsiao-Chin Huang

Hitotsubashi Journal of Economics, 2015, vol. 56, issue 2, 213-229

Abstract: This study applies the three stage Super-SBM model, which combines the approaches of Fried et al. (2002) and Tone (2002), to analyze the influence of banks' internationalization and risk on efficiency. Most former works focused on the effects of risk, but they seldom emphasize the impact of internationalization. Therefore, in addition to the modification of the empirical model, this study also considers internationalization as an external factor into the efficiency measurement. The results show Taiwan's commercial banks could increase its degree of internationalization to improve efficiency, whether by using the strategy of foreign direct investment or increasing foreign shareholding. This study also evidences that several banks have a fine management capacity, but they are easily affected by external factors to be defined as inefficient units.

Keywords: data envelopment analysis; efficiency; internationalization; bank; risk management (search for similar items in EconPapers)
JEL-codes: G21 L22 L25 L33 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:hit:hitjec:v:56:y:2015:i:2:p:213-229

DOI: 10.15057/27599

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