IDEAS home Printed from https://ideas.repec.org/a/oup/ajagec/v81y1999i4p902-913.html
   My bibliography  Save this article

The Nonparametric Risk-Adjusted Efficiency Measurement: An Application to Taiwan's Major Rural Financial Intermediaries

Author

Listed:
  • Ching-Cheng Chang

Abstract

In this article, a nonparametric approach is used to incorporate risk into the measurement of technical efficiencies of the major financial intermediaries in rural Taiwan. Risk is treated as a joint but undesirable output given the fact that various regulatory actions may prevent its free disposability. Three risk indicators (nonperforming loans, allowance for loan losses, and risky assets) are employed alternatively in the empirical work. Results suggest that all three risk constraints are binding. Regulations on controlling risky assets and loan loss reserves are effective but more burdensome than those on controlling loan quality. Copyright 1999, Oxford University Press.

Suggested Citation

  • Ching-Cheng Chang, 1999. "The Nonparametric Risk-Adjusted Efficiency Measurement: An Application to Taiwan's Major Rural Financial Intermediaries," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(4), pages 902-913.
    • Handle: RePEc:oup:ajagec:v:81:y:1999:i:4:p:902-913
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.2307/1244333
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. K. Hafsal & Anandarao Suvvari & S. Raja Sethu Durai, 2020. "Efficiency of Indian banks with non-performing assets: evidence from two-stage network DEA," Future Business Journal, Springer, vol. 6(1), pages 1-9, December.
    2. Li, Yang, 2020. "Analyzing efficiencies of city commercial banks in China: An application of the bootstrapped DEA approach," Pacific-Basin Finance Journal, Elsevier, vol. 62(C).
    3. Alfons Lansink & Elvira Silva, 2003. "CO 2 and Energy Efficiency of Different Heating Technologies in the Dutch Glasshouse Industry," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 24(4), pages 395-407, April.
    4. Hirofumi Fukuyama & William L. Weber, 2017. "Japanese Bank Productivity, 2007–2012: A Dynamic Network Approach," Pacific Economic Review, Wiley Blackwell, vol. 22(4), pages 649-676, October.
    5. Glazyrina, Anna & Shaik, Saleem, 2010. "Risk Adjusted Productivity Measures," 2010 Annual Meeting, February 6-9, 2010, Orlando, Florida 56580, Southern Agricultural Economics Association.
    6. Yung-Ho Chiu & Yu-Chuan Chen & Xue-Jie Bai, 2011. "Efficiency and risk in Taiwan banking: SBM super-DEA estimation," Applied Economics, Taylor & Francis Journals, vol. 43(5), pages 587-602.
    7. Boussemart, Jean-Philippe & Leleu, Hervé & Shen, Zhiyang & Vardanyan, Michael & Zhu, Ning, 2019. "Decomposing banking performance into economic and credit risk efficiencies," European Journal of Operational Research, Elsevier, vol. 277(2), pages 719-726.
    8. Chiu, Ching-Ren & Chiu, Yung-Ho & Chen, Yu-Chuan & Fang, Chen-Ling, 2016. "Exploring the source of metafrontier inefficiency for various bank types in the two-stage network system with undesirable output," Pacific-Basin Finance Journal, Elsevier, vol. 36(C), pages 1-13.
    9. Chiu, Yung-Ho & Chen, Yu-Chuan, 2009. "The analysis of Taiwanese bank efficiency: Incorporating both external environment risk and internal risk," Economic Modelling, Elsevier, vol. 26(2), pages 456-463, March.
    10. Ikram Ullah Khan & Sadaqat Ali & Habib Nawaz Khan, 2018. "Market Concentration, Risk-taking, and Efficiency of Commercial Banks in Pakistan: An Application of the Two-Stage Double Bootstrap DEA," Business & Economic Review, Institute of Management Sciences, Peshawar, Pakistan, vol. 10(2), pages 65-96, June.
    11. Mette Asmild & Minyan Zhu, 2012. "Bank efficiency and risk during the financial crisis: Evidence from weight restricted DEA models," MSAP Working Paper Series 03_2012, University of Copenhagen, Department of Food and Resource Economics.
    12. Chen, Yu-Chuan & Chiu, Yung-Ho & Huang, Chin-Wei & Tu, Chien Heng, 2013. "The analysis of bank business performance and market risk—Applying Fuzzy DEA," Economic Modelling, Elsevier, vol. 32(C), pages 225-232.
    13. Sun, Lei & Chang, Tzu-Pu, 2011. "A comprehensive analysis of the effects of risk measures on bank efficiency: Evidence from emerging Asian countries," Journal of Banking & Finance, Elsevier, vol. 35(7), pages 1727-1735, July.
    14. Yang Li & An-Chi Liu & Yi-Ying Yu & Yueru Zhang & Yiting Zhan & Wen-Cheng Lin, 2022. "Bootstrapped DEA and Clustering Analysis of Eco-Efficiency in China’s Hotel Industry," Sustainability, MDPI, vol. 14(5), pages 1-16, March.
    15. Li-Ling Kao, 2023. "ESG-Based Performance Assessment of the Operation and Management of Industrial Parks in Taiwan," Sustainability, MDPI, vol. 15(2), pages 1-27, January.
    16. Gabriel A. Ogunmola & Fengsheng Chien & Ka Yin Chau & Li Li, 2022. "The Influence of Capital Requirement of Basel III Adoption on Banks’ Operating Efficiency: Evidence from U.S. Banks," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 11(2), pages 5-26.
    17. Chen, Ku-Hsieh, 2012. "Incorporating risk input into the analysis of bank productivity: Application to the Taiwanese banking industry," Journal of Banking & Finance, Elsevier, vol. 36(7), pages 1911-1927.
    18. Skevas, Theodoros & Stefanou, Spiro E. & Oude Lansink, Alfons, 2014. "Pesticide use, environmental spillovers and efficiency: A DEA risk-adjusted efficiency approach applied to Dutch arable farming," European Journal of Operational Research, Elsevier, vol. 237(2), pages 658-664.
    19. Asmild, Mette & Zhu, Minyan, 2016. "Controlling for the use of extreme weights in bank efficiency assessments during the financial crisis," European Journal of Operational Research, Elsevier, vol. 251(3), pages 999-1015.
    20. Lili DING & Haihong ZHENG & Wanglin KANG, 2017. "Measuring the Green Efficiency of Ocean Economy in China: An Improved Three - Stage DEA Model," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 5-22, March.
    21. Jia-Ching Juo & Yu-Hui Lin & Tsai-Chia Chen, 2015. "Productivity change of Taiwanese farmers’ credit unions: a nonparametric metafrontier Malmquist–Luenberger productivity indicator," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 23(1), pages 125-147, March.
    22. Fukuyama, Hirofumi & Matousek, Roman, 2017. "Modelling bank performance: A network DEA approach," European Journal of Operational Research, Elsevier, vol. 259(2), pages 721-732.
    23. Chiu, Yung-ho & Luo, Zhengying & Chen, Yu-Chuan & Wang, Zebin & Tsai, Min-Pei, 2013. "A comparison of operating performance management between Taiwan banks and foreign banks based on the Meta-Hybrid DEA model," Economic Modelling, Elsevier, vol. 33(C), pages 433-439.
    24. Zhu, Ning & Wu, Yanrui & Wang, Bing & Yu, Zhiqian, 2019. "Risk preference and efficiency in Chinese banking," China Economic Review, Elsevier, vol. 53(C), pages 324-341.
    25. Louhichi, Awatef & Boujelbene, Younes, 2020. "Credit risk pricing and the rationality of lending decision-making within dual banking systems: A parametric approach," Economic Systems, Elsevier, vol. 44(1).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:ajagec:v:81:y:1999:i:4:p:902-913. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.