Effect of Internationalization on the Cost Efficiency of Taiwan’s Banks

Cheng, Cheng-Ping; Liang, Lien‐Wen; Huang, Chen-Ta

doi:10.1080/1540496x.2014.1013857

Cited by 7 publications

(3 citation statements)

References 34 publications

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“…Lai et al [13] found that non-FHC banks have higher loan ratios, which means smaller banks are more capable of generating profits. Cheng et al [14] claimed that non-FHC banks are more capable of increasing cost efficiency than FHC banks because of their awareness of firm expenditure and desire to diversify financial products. Similarly, Chiou [15] asserted that an independent bank faces an adverse impact after becoming a subsidiary of a FHC because of the increased complexity in the decision-making process and resource management.In contrast, some researchers found that FHC banks outperform non-FHC banks.…”

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confidence: 99%

Business Sustainability Performance Evaluation for Taiwanese Banks—A Hybrid Multiple-Criteria Decision-Making Approach

Lin

Chang

2019

Sustainability

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The Taiwanese government has encouraged bank privatization and the establishment of financial holding companies to improve banking sustainability and consolidate banks, insurance companies, and securities firms. It is important for bank decision makers to set policies that lead to sustainable development. However, the literature remains unclear about the types of banks that achieve greater business sustainability. This paper aims to (1) identify the criteria that affect banks’ business sustainability and (2) determine the most sustainable types of banks. This study uses a hybrid multiple-criteria decision-making approach on eighteen financial criteria for twenty-five Taiwanese listed banks with data from 2012 to 2016. The results show that non-performing loan ratio is the most critical factor. In addition, financial holding companies outperformed non-financial holding companies. Financial holding companies with insurance companies as their largest subsidiaries performed best. Private banks exceeded state-owned banks in sustainability. The results lead to two implications. First, banks should value risk over profitability and diversify financial products. Second, the government should continue to privatize banks. These findings suggest that bank managers implement an enterprise resource planning (ERP) system with a master plan, framework, and guidelines to help them track bank performance indicators to ensure sustainability.

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confidence: 99%

Business Sustainability Performance Evaluation for Taiwanese Banks—A Hybrid Multiple-Criteria Decision-Making Approach

Lin

Chang

2019

Sustainability

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“…Chen, Ho and Hsu (2014) pointed out that having an adequate capital buffer has a positive impact on the profitability of banks. Cheng et al (2015) took the return on equity (ROE) of banks as compensation for the cost of capital caused by excess capital. Boyson, Fahlenbrach and Stulz (2016) stated that the optimal risk level of a bank depends on its franchise value.…”

Section: Literature Reviewmentioning

confidence: 99%

The Influence of Capital Requirement of Basel III Adoption on Banks’ Operating Efficiency: Evidence from U.S. Banks

Ayodeji¹,

Chien

Chau

et al. 2022

Journal of Central Banking Theory and Practice

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The United States is recognized as the largest economic entity in the world and its financial system has developed steadily through the guidance of the Federal Reserve System for over one hundred years. However, in recent years, the global economic downturn, coupled with the global COVID-19 pandemic, has led to an unprecedented economic depression and rapid decline in the United States financial sector. Although the U.S. government has gradually instructed banks to raise the core quantity but a giant crisis under the economic depression is still present. This study thus takes U.S. commercial banks as the subject of research and employs the two-stage bootstrapped truncated regression to investigate the impacts of increases in required Core, Tier 1, and total capital adequacy ratios on their efficiency.

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“…Furthermore, most studies used the intermediation approach, as banks are considered as the mediator of financial services that input capital and labour to convert savings into loans and investments, with amount as the measuring unit. After reviewing the criteria-related literature, this study selected criteria based on those used in the related literature and the database of the Taiwan Economic Journal (Cheng, Liang, & Huang, 2014;Elyasiani & Wang, 2012;Huang & Chung, 2017;Liu & Hsu, 2014;Wu, 2012;Yen, Yang, Lin, & Lee, 2012). Also, the titles and data in the financial reports announced by the research samples during 2001-2010 are other sources of the criteria selection in this study.…”

Section: Research Constructs and Criteriamentioning

confidence: 99%

Evaluating the criteria for financial holding company operating ability based on the DEMATEL approach – the case of Taiwan

Chang

Liu

et al. 2019

Economic Research-Ekonomska Istraživanja

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Evaluating criteria selection has significant impacts on data envelopment analysis (DEA) efficiency estimates. Selecting the proper evaluation criteria lead to successful and meaningful results of decision-making. This study aims to use the Decision Making Trial and Evaluation Laboratory (DEMATEL) method to evaluate the most important constructs and criteria and also establish causality relationships among others for financial holding companies (FHCs) of banks' operating ability in Taiwan. In this research 15 criteria were confirmed through reviewing various articles associated with this issue. Then, the information from the questionnaire was turned into the DEMATEL questionnaire and was distributed among nine experts and also members of the FHCs of Taiwan. The research results show that employees, total assets, total liabilities, non-interest income, income on investments, net profits before tax, net worth, and EPS are eight causal criteria. Furthermore, operating expenses, capital, interest expenses, interest income, operating income, return on assets (ROA), and return on equity (ROE) are seven effect criteria.

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Effect of Internationalization on the Cost Efficiency of Taiwan’s Banks

Cited by 7 publications

References 34 publications

Business Sustainability Performance Evaluation for Taiwanese Banks—A Hybrid Multiple-Criteria Decision-Making Approach

Business Sustainability Performance Evaluation for Taiwanese Banks—A Hybrid Multiple-Criteria Decision-Making Approach

The Influence of Capital Requirement of Basel III Adoption on Banks’ Operating Efficiency: Evidence from U.S. Banks

Evaluating the criteria for financial holding company operating ability based on the DEMATEL approach – the case of Taiwan

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