IDEAS home Printed from https://ideas.repec.org/a/wly/mgtdec/v43y2022i5p1621-1634.html
   My bibliography  Save this article

The impact of market share on efficiency of commercial banks: Resampling slacks‐based measure data envelopment analyses model

Author

Listed:
  • Ying Li
  • Yung‐ho Chiu
  • Ying Yu Chen
  • Lihua Wang
  • Yi‐Nuo Lin
  • Su‐Wan Wang

Abstract

This study applies resampling data envelopment analyses (DEA) and includes two estimation models: Triangular and Past–Present Models, to explore the operating efficiency of 37 commercial banks in Taiwan from 2014 to 2016. The empirical results are as follows: 1. No matter which models were used, the most inefficient banks from 2014 to 2016 were Bank of PANHSIN. 2. Resample model can more accurately estimate the relative efficiency of the banks than the slacks‐based measure (SBM) model. 3. Based on the Resample model, the empirical results of the SBM model show that the overestimation of the efficiency ranking is more serious.

Suggested Citation

  • Ying Li & Yung‐ho Chiu & Ying Yu Chen & Lihua Wang & Yi‐Nuo Lin & Su‐Wan Wang, 2022. "The impact of market share on efficiency of commercial banks: Resampling slacks‐based measure data envelopment analyses model," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(5), pages 1621-1634, July.
    • Handle: RePEc:wly:mgtdec:v:43:y:2022:i:5:p:1621-1634
    DOI: 10.1002/mde.3477
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/mde.3477
    Download Restriction: no
    File URL: https://libkey.io/10.1002/mde.3477?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Renyu Li & Li Li & Peijiang Zou, 2020. "Credit risk shocks and banking efficiency: a study based on a bootstrap-DEA model with nonperforming loans as bad output," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 48(1), pages 1-19, April.
    2. Hirofumi Fukuyama & William Weber, 2015. "Measuring Japanese bank performance: a dynamic network DEA approach," Journal of Productivity Analysis, Springer, vol. 44(3), pages 249-264, December.
    3. Fukuyama, Hirofumi & Guerra, Ramon & Weber, William L., 1999. "Efficiency and ownership: evidence from Japanese credit cooperatives," Journal of Economics and Business, Elsevier, vol. 51(6), pages 473-487.
    4. Berger, Allen N. & Humphrey, David B., 1991. "The dominance of inefficiencies over scale and product mix economies in banking," Journal of Monetary Economics, Elsevier, vol. 28(1), pages 117-148, August.
    5. Stewart, Chris & Matousek, Roman & Nguyen, Thao Ngoc, 2016. "Efficiency in the Vietnamese banking system: A DEA double bootstrap approach," Research in International Business and Finance, Elsevier, vol. 36(C), pages 96-111.
    6. Qingxian An & Haoxun Chen & Jie Wu & Liang Liang, 2015. "Measuring slacks-based efficiency for commercial banks in China by using a two-stage DEA model with undesirable output," Annals of Operations Research, Springer, vol. 235(1), pages 13-35, December.
    7. Ray, Subhash C. & Das, Abhiman, 2010. "Distribution of cost and profit efficiency: Evidence from Indian banking," European Journal of Operational Research, Elsevier, vol. 201(1), pages 297-307, February.
    8. Amir Moradi-Motlagh & Abbas Valadkhani & Ali Salman Saleh, 2015. "Rising efficiency and cost saving in Australian banks: a bootstrap approach," Applied Economics Letters, Taylor & Francis Journals, vol. 22(3), pages 189-194, February.
    9. Dauw-Song Zhu & Yi-Kang Chen & Louis P. White, 2014. "A study on profitability and marketability of Taiwanese bank firms before and after the Financial Holding Company Act," International Journal of Business Performance Management, Inderscience Enterprises Ltd, vol. 15(3), pages 207-228.
    10. E. Grigoroudis & E. Tsitsiridi & C. Zopounidis, 2013. "Linking customer satisfaction, employee appraisal, and business performance: an evaluation methodology in the banking sector," Annals of Operations Research, Springer, vol. 205(1), pages 5-27, May.
    11. Ferrier, Gary D. & Lovell, C. A. Knox, 1990. "Measuring cost efficiency in banking : Econometric and linear programming evidence," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 229-245.
    12. Jia-Ching Juo, 2014. "Decomposing the change in profit of Taiwanese banks: incorporating risk," Journal of Productivity Analysis, Springer, vol. 41(2), pages 247-262, April.
    13. Chuang-Min Chao & Ming-Miin Yu & Hsiao-Ning Wu, 2015. "An Application of the Dynamic Network DEA Model: The Case of Banks in Taiwan," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 51(S1), pages 133-151, January.
    14. Mu-Jen Chen & Yung-ho Chiu & Chyanlong Jan & Yu-Chuan Chen & Hsiang-Hsi Liu, 2015. "Efficiency and Risk in Commercial Banks - Hybrid DEA Estimation," Global Economic Review, Taylor & Francis Journals, vol. 44(3), pages 335-352, September.
    15. Barros, Carlos Pestana & Managi, Shunsuke & Matousek, Roman, 2012. "The technical efficiency of the Japanese banks: Non-radial directional performance measurement with undesirable output," Omega, Elsevier, vol. 40(1), pages 1-8, January.
    16. Berger, Allen N. & Hanweck, Gerald A. & Humphrey, David B., 1987. "Competitive viability in banking : Scale, scope, and product mix economies," Journal of Monetary Economics, Elsevier, vol. 20(3), pages 501-520, December.
    17. George E. Halkos & Roman Matousek & Nickolaos G. Tzeremes, 2016. "Pre-evaluating technical efficiency gains from possible mergers and acquisitions: evidence from Japanese regional banks," Review of Quantitative Finance and Accounting, Springer, vol. 46(1), pages 47-77, January.
    18. Cheng-Wen Lee & Chia-Jui Peng & Wen-Chuan Fu, 2015. "Study on Efficiency Sustainability of Taiwan’s Bank Performance under a Dynamic Framework," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 5(2), pages 1-1.
    19. Léopold Simar & Paul W. Wilson, 1998. "Sensitivity Analysis of Efficiency Scores: How to Bootstrap in Nonparametric Frontier Models," Management Science, INFORMS, vol. 44(1), pages 49-61, January.
    20. 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.
    21. Chih-Ching Yang, 2014. "An enhanced DEA model for decomposition of technical efficiency in banking," Annals of Operations Research, Springer, vol. 214(1), pages 167-185, March.
    22. Hassan Ismail Hassan & Ammar Jreisat, 2016. "Cost Efficiency of the Egyptian Banking Sector: A Panel Data Analysis," International Journal of Economics and Financial Issues, Econjournals, vol. 6(3), pages 861-871.
    23. Avkiran, Necmi Kemal, 2015. "An illustration of dynamic network DEA in commercial banking including robustness tests," Omega, Elsevier, vol. 55(C), pages 141-150.
    24. Kaoru Tone, 2013. "Resampling in DEA," GRIPS Discussion Papers 13-23, National Graduate Institute for Policy Studies.
    25. Barros, C.P. & Emrouznejad, Ali, 2016. "Assessing productive efficiency of banks using integrated Fuzzy-DEA and bootstrapping: A case of Mozambican banksAuthor-Name: Wanke, Peter," European Journal of Operational Research, Elsevier, vol. 249(1), pages 378-389.
    26. Grabowski, Richard & Rangan, Nanda & Rezvanian, Rasoul, 1993. "Organizational forms in banking: An empirical investigation of cost efficiency," Journal of Banking & Finance, Elsevier, vol. 17(2-3), pages 531-538, April.
    27. Tone, Kaoru, 2001. "A slacks-based measure of efficiency in data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 130(3), pages 498-509, May.
    28. 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).
    29. Wanke, Peter & Abul Kalam Azad, Md & Emrouznejad, Ali & Antunes, Jorge, 2019. "A dynamic network DEA model for accounting and financial indicators: A case of efficiency in MENA banking," International Review of Economics & Finance, Elsevier, vol. 61(C), pages 52-68.
    30. Wijesiri, Mahinda & Viganò, Laura & Meoli, Michele, 2015. "Efficiency of microfinance institutions in Sri Lanka: a two-stage double bootstrap DEA approach," Economic Modelling, Elsevier, vol. 47(C), pages 74-83.
    31. George Halkos & Roman Matousek & Nickolaos Tzeremes, 2016. "Pre-evaluating technical efficiency gains from possible mergers and acquisitions: evidence from Japanese regional banks," Review of Quantitative Finance and Accounting, Springer, vol. 46(1), pages 47-77, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yung‐ho Chiu & Tai‐Yu Lin & Tzu‐Han Chang & Yi‐Nuo Lin & Shih‐Yung Chiu, 2021. "Prevaluating efficiency gains from potential mergers and acquisitions in the financial industry with the Resample Past–Present–Future data envelopment analysis approach," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(2), pages 369-384, March.
    2. Jamal Ouenniche & Skarleth Carrales, 2018. "Assessing efficiency profiles of UK commercial banks: a DEA analysis with regression-based feedback," Annals of Operations Research, Springer, vol. 266(1), pages 551-587, July.
    3. Ying Li & Yung-ho Chiu & Tai-Yu Lin & Yun Yuan Huang, 2019. "Market share and performance in Taiwanese banks: min/max SBM DEA," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 27(2), pages 233-252, July.
    4. Doumpos, Michalis & Zopounidis, Constantin & Gounopoulos, Dimitrios & Platanakis, Emmanouil & Zhang, Wenke, 2023. "Operational research and artificial intelligence methods in banking," European Journal of Operational Research, Elsevier, vol. 306(1), pages 1-16.
    5. 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.
    6. Vaneet Bhatia & Sankarshan Basu & Subrata Kumar Mitra & Pradyumna Dash, 2018. "A review of bank efficiency and productivity," OPSEARCH, Springer;Operational Research Society of India, vol. 55(3), pages 557-600, November.
    7. Pooja Bansal & Aparna Mehra & Sunil Kumar, 2022. "Dynamic Metafrontier Malmquist–Luenberger Productivity Index in Network DEA: An Application to Banking Data," Computational Economics, Springer;Society for Computational Economics, vol. 59(1), pages 297-324, January.
    8. Yan He & Yung-ho Chiu & Bin Zhang, 2020. "Prevaluating Technical Efficiency Gains From Potential Mergers and Acquisitions in China’s Coal Industry," SAGE Open, , vol. 10(3), pages 21582440209, July.
    9. Mahmoudabadi, Mohammad Zarei & Emrouznejad, Ali, 2019. "Comprehensive performance evaluation of banking branches: A three-stage slacks-based measure (SBM) data envelopment analysis," International Review of Economics & Finance, Elsevier, vol. 64(C), pages 359-376.
    10. Ying Li & Yung-Ho Chiu & Tai-Yu Lin & Tzu-Han Chang, 2020. "Pre-Evaluating the Technical Efficiency Gains from Potential Mergers and Acquisitions in the IC Design Industry," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 19(02), pages 525-559, April.
    11. Bai, Xue-jie & Zeng, Jin & Chiu, Yung-Ho, 2019. "Pre-evaluating efficiency gains from potential mergers and acquisitions based on the resampling DEA approach: Evidence from China's railway sector," Transport Policy, Elsevier, vol. 76(C), pages 46-56.
    12. Rezvanian, Rasoul & Mehdian, Seyed, 2002. "An examination of cost structure and production performance of commercial banks in Singapore," Journal of Banking & Finance, Elsevier, vol. 26(1), pages 79-98, January.
    13. Franz R. Hahn, 2005. "Determinants of Bank Profitability in Austria. A Micro-Macro Approach," WIFO Studies, WIFO, number 25688, April.
    14. Mohamed Dia & Amirmohsen Golmohammadi & Pawoumodom M. Takouda, 2020. "Relative Efficiency of Canadian Banks: A Three-Stage Network Bootstrap DEA," JRFM, MDPI, vol. 13(4), pages 1-25, April.
    15. Fukuyama, Hirofumi & Matousek, Roman, 2017. "Modelling bank performance: A network DEA approach," European Journal of Operational Research, Elsevier, vol. 259(2), pages 721-732.
    16. Berger, Allen N. & Humphrey, David B., 1997. "Efficiency of financial institutions: International survey and directions for future research," European Journal of Operational Research, Elsevier, vol. 98(2), pages 175-212, April.
    17. 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).
    18. Partovi, Elmira & Matousek, Roman, 2019. "Bank efficiency and non-performing loans: Evidence from Turkey," Research in International Business and Finance, Elsevier, vol. 48(C), pages 287-309.
    19. Ta‐Cheng Chang & Yung‐Ho Chiu, 2006. "Affecting Factors On Risk‐Adjusted Efficiency In Taiwan'S Banking Industry," Contemporary Economic Policy, Western Economic Association International, vol. 24(4), pages 634-648, October.
    20. Luis R. Murillo‐Zamorano, 2004. "Economic Efficiency and Frontier Techniques," Journal of Economic Surveys, Wiley Blackwell, vol. 18(1), pages 33-77, February.

    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:wly:mgtdec:v:43:y:2022:i:5:p:1621-1634. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/7976 .

    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.