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Using Network DEA to Explore the Effect of Mobile Payment on Taiwanese Bank Efficiency

Author

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  • Bao-Ngoc Tong

    (College of Management, National Yunlin University of Science and Technology, Douliu 64002, Taiwan)

  • Cheng-Ping Cheng

    (College of Management, National Yunlin University of Science and Technology, Douliu 64002, Taiwan)

  • Lien-Wen Liang

    (Department of Banking and Finance, Chinese Culture University, Taipei City 11114, Taiwan)

  • Yi-Jun Liu

    (College of Management, National Yunlin University of Science and Technology, Douliu 64002, Taiwan)

Abstract

In order to explore the potential influence of new mobile payment services on the Ephesus model developed by Kao and Hwang (2008), we investigated the relative performance of 19 Taiwanese banks from 2018 to 2021. The network efficiency was divided into two parts: management efficiency and profitability efficiency. Only one bank achieved total efficiency from 2019 to 2021. The stage efficiencies showed increments during the first three years (2018–2020), but they declined in 2021. Most banks had low efficiency in the management stage and high efficiency in the profitability stage, suggesting that there are weaknesses in the management of physical resources but high awareness that mobile payment services can be exploited to achieve high profitability. Our results prove that mobile payment is a potential and profitable new service that Taiwanese banks should take advantage of. Comparing the results between the CCR model and the NDEA model, we observed that the NDEA model has more explanatory power, as it provides insight into the internal structure of the working process of Taiwanese banks.

Suggested Citation

  • Bao-Ngoc Tong & Cheng-Ping Cheng & Lien-Wen Liang & Yi-Jun Liu, 2023. "Using Network DEA to Explore the Effect of Mobile Payment on Taiwanese Bank Efficiency," Sustainability, MDPI, vol. 15(8), pages 1-18, April.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:8:p:6344-:d:1117979
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    References listed on IDEAS

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