Ownership and production efficiency: Evidence from Taiwanese banks

Yang Li, Jin-Li Hu (jinlihu@nycu.edu.tw) and Yung-Ho Chiu

The Service Industries Journal, 2004, vol. 24, issue 4, 129-148

Abstract: In the early 1990s, Taiwan began her deregulation trend in order to enhance competition and economic efficiency across all industries. We derive a theoretical framework to predict possible rankings in technical efficiencies of public, mixed, and private banks. A panel data set with 43 Taiwanese banks during 1997--1999 is used for empirical analysis. We then apply a translog distance function to estimate technical efficiencies. The relationship between technical efficiency and government shareholding is also examined. Empirical results show that a public bank in Taiwan can improve its technical efficiency by mixed ownership at a diminishing rate. Moreover, banks in Taiwan on average performed worse after the 1997 Asian financial crisis.

Date: 2004
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Citations: View citations in EconPapers (7)

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DOI: 10.1080/0264206042000275235

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