2018
DOI: 10.18488/journal.aefr.2018.86.815.831
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Impact of Operational Risk Toward the Efficiency of Banking - Evidence from Taiwans Banking Industry

Abstract: This study adopts a GARCH model to estimate the operational risk of Taiwan's banking industry by the Top-Down method. Based on the approach of Battese and Coelli (1995) we estimate the Trans-log cost model and the inefficient model simultaneously by the Maximum likelihood method. Our empirical result shows that the operational risks have a significantly positive impact on cost inefficiency -that is, regardless of which methods we use for calculation, operational risk drives down economic efficiency. Comparing … Show more

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Cited by 12 publications
(7 citation statements)
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“…Economies globally are striving to survive competitively. With rising taxes and tough economic conditions, nations globally are struggling to maintain or improve their current state (Held et al, 2000;Elkhayat & ElBannan, 2018;Ghosh et al, 2018;Cheng et al, 2018;Liu & Yin, 2018;Omodero & Ogbonnaya, 2018;Hallunovi & Berdo, 2018). Bahrain is a small island-based economy, which is full of oil resources (Bahrain, 2019).…”
Section: Economy Of Bahrainmentioning
confidence: 99%
“…Economies globally are striving to survive competitively. With rising taxes and tough economic conditions, nations globally are struggling to maintain or improve their current state (Held et al, 2000;Elkhayat & ElBannan, 2018;Ghosh et al, 2018;Cheng et al, 2018;Liu & Yin, 2018;Omodero & Ogbonnaya, 2018;Hallunovi & Berdo, 2018). Bahrain is a small island-based economy, which is full of oil resources (Bahrain, 2019).…”
Section: Economy Of Bahrainmentioning
confidence: 99%
“…Meanwhile, in developing countries like Indonesia, the digital development is still at an early stage, but the innovation growth through the creativity industry and start-ups are growing rapidly (IMD, 2017). This creates a challenge for incumbent firms to build its digital infrastructure since it requires big investment, meanwhile, the return of investment could not be guaranteed due to the fastest changing of market and technology (Das et al, 2016;Nze et al, 2016;Kimengsi & Gwan, 2017;Cheng et al, 2018 ;CHE & Sundjo, 2018). The competition becomes tighter since new entries are able to offer customers solutions over the digital infrastructure that disrupts the incumbent firms.…”
Section: Introductionmentioning
confidence: 99%
“…Better brand image always shows positive effect on supply chain image. As the brand and supply chain play important role on each other's (Brun & Castelli, 2008;Nze et al, 2016;Kimengsi & Gwan, 2017;Cheng et al, 2018 ;CHE & Sundjo, 2018).…”
Section: Introductionmentioning
confidence: 99%