Operational and investment efficiency of investment trust companies: Do foreign firms outperform domestic firms?

Mohammad Nourani, Qian Long Kweh (), Wen-Min Lu and Ikhlaas Gurrib
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Qian Long Kweh: Canadian University Dubai
Wen-Min Lu: Chinese Culture University
Ikhlaas Gurrib: Canadian University Dubai

Financial Innovation, 2022, vol. 8, issue 1, 1-26

Abstract: Abstract This study examines the efficiency of investment trust companies (ITCs) from 2011 to 2020 using a meta-frontier two-stage network data envelopment analysis (DEA) based on the directional distance function (DDF). We improved the accuracy of the efficiency measurement and added a network-based ranking component to rank the top-performing entities. In the group-specific technology assessment, foreign ITCs excel in investment efficiency. Meanwhile, in the meta-technology assessment, domestic ITCs outperform foreign ITCs in terms of both investment and operational efficiencies. Group-specific technology efficiency scores were found to be lower than or equal to the meta-technology efficiency scores for both the operational and investment stages. Based on the network-based ranking approach, Yuan Ta, a domestic ITC that ranked fourth in the operational stage and first in the investment stage, can be used as a reliable benchmark. This study will enable practitioners to gain a better understanding of the performance of ITCs operating under heterogeneous technologies.

Keywords: Data envelopment analysis; Metafrontier two-stage network; Network-based ranking; Directional distance function; Investment trust companies (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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DOI: 10.1186/s40854-022-00382-1

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