The Effect of Risky Assets to Operating Efficiencies for Listed Securities Firms in Taiwan Using the Data Envelopment Analysis
This paper employs a the variable returns to scale DEA
model to take account of risky assets and estimate the operating
efficiencies for the 21 domestic listed securities firms during the
period 2005-2009. Evidence is found that on average the brokerage
securities firms- operating efficiencies are better than integrated
securities firms. Evidence is also found that the technical inefficiency
from inappropriate management constitutes the main source of the
operating inefficiency for both types of securities firms. Moreover, the
scale economies prevail in brokerage and integrated securities firms,
in other words, which exhibit the characteristic of increasing returns to
scale.
[1] Altunbas, Y., M.H. Liu, P. Molyneux, and R. Seth (2000), "Efficiency and
risk in Japanese banking," Journal of Banking and Finance, 24,
1605-1628.
[2] Banker, R.D., A. Charnes and W.W. Cooper, (1984), "Some models for
estimating technical and scale inefficiencies in data envelopment
analysis," Management Science, 30, 1078-1092.
[3] Berger, A.N., D. Hancock, and D.B. Humphrey (1993), "Bank efficiency
derived from the profit function," Journal of Banking and Finance, 17,
317-347.
[4] Bhattacharyya, A., C.A.K. Lovell, and P. Sahay (1997), "The impact of
liberalization on the productive efficiency of Indian commercial banks,"
European Journal of Operational Research, 98, 2, 332-345.
[5] Charnes, A., W.W. Cooper and E. Rhodes, (1978), "Measuring the
efficiency of decision marking units," European Journal of Operational
Research, 2, 429-444.
[6] Coelli, T.J., D.S. Prasada Rao and G.E. Battese (1998), An Introduction to
Efficiency and Productivity Analysis, Kluwer Academic Publishers,
Boston.
[7] Farrell, M. J., (1957), "The measurement of productive efficiency,"
Journal Royal Statistical Society, 120, 253-281.
[8] Fukuyama, H. and L. Weber (1999), "The efficiency and productivity of
Japanese securities firms, 1988-93." Japan and the World Economy, 11,
115-133.
[9] Goldberg, L.G., G.A. Hanweck, M. Keenan and A. Young (1991),
"Economies of scale and scope in the securities industry", Journal of
Banking and Finance, 15, 91-107.
[10] Mester, L. J. (1996), "A study of bank efficiency taking into account risk
preferences," Journal of Banking and Finance, 20, 1025-1045.
[11] Pastor, J.M. (1999), "Efficiency and risk management in Spanish
banking: a method to decompose risk," Applied Financial Economics, 9,
381-384.
[12] Seiford, L. M. and J. Zhu (1999), "Profitability and marketability of the
top 55 U.S. commercial banks", Management Science, 45, 1270-1288.
[13] Thanassoulis, E. (2001), Introduction to Theory and Application of Data
Envelopment Analysis, Kluwer Academic Publishers, Norwell.
[14] Wang, K.-L., Y.-T. Tseng and C.-C. Weng (2003), "A study of production
efficiencies of integrated securities firms in Taiwan", Applied Financial
Economics, 13, 159-167
[15] Liao, C.-S., C.-H. Yang and D. Liu (2010), "Efficiency, productivity and
ownership structure for securities firms in Taiwan," Journal of Money,
Investment and Banking, 14, 46-58.
[1] Altunbas, Y., M.H. Liu, P. Molyneux, and R. Seth (2000), "Efficiency and
risk in Japanese banking," Journal of Banking and Finance, 24,
1605-1628.
[2] Banker, R.D., A. Charnes and W.W. Cooper, (1984), "Some models for
estimating technical and scale inefficiencies in data envelopment
analysis," Management Science, 30, 1078-1092.
[3] Berger, A.N., D. Hancock, and D.B. Humphrey (1993), "Bank efficiency
derived from the profit function," Journal of Banking and Finance, 17,
317-347.
[4] Bhattacharyya, A., C.A.K. Lovell, and P. Sahay (1997), "The impact of
liberalization on the productive efficiency of Indian commercial banks,"
European Journal of Operational Research, 98, 2, 332-345.
[5] Charnes, A., W.W. Cooper and E. Rhodes, (1978), "Measuring the
efficiency of decision marking units," European Journal of Operational
Research, 2, 429-444.
[6] Coelli, T.J., D.S. Prasada Rao and G.E. Battese (1998), An Introduction to
Efficiency and Productivity Analysis, Kluwer Academic Publishers,
Boston.
[7] Farrell, M. J., (1957), "The measurement of productive efficiency,"
Journal Royal Statistical Society, 120, 253-281.
[8] Fukuyama, H. and L. Weber (1999), "The efficiency and productivity of
Japanese securities firms, 1988-93." Japan and the World Economy, 11,
115-133.
[9] Goldberg, L.G., G.A. Hanweck, M. Keenan and A. Young (1991),
"Economies of scale and scope in the securities industry", Journal of
Banking and Finance, 15, 91-107.
[10] Mester, L. J. (1996), "A study of bank efficiency taking into account risk
preferences," Journal of Banking and Finance, 20, 1025-1045.
[11] Pastor, J.M. (1999), "Efficiency and risk management in Spanish
banking: a method to decompose risk," Applied Financial Economics, 9,
381-384.
[12] Seiford, L. M. and J. Zhu (1999), "Profitability and marketability of the
top 55 U.S. commercial banks", Management Science, 45, 1270-1288.
[13] Thanassoulis, E. (2001), Introduction to Theory and Application of Data
Envelopment Analysis, Kluwer Academic Publishers, Norwell.
[14] Wang, K.-L., Y.-T. Tseng and C.-C. Weng (2003), "A study of production
efficiencies of integrated securities firms in Taiwan", Applied Financial
Economics, 13, 159-167
[15] Liao, C.-S., C.-H. Yang and D. Liu (2010), "Efficiency, productivity and
ownership structure for securities firms in Taiwan," Journal of Money,
Investment and Banking, 14, 46-58.
@article{"International Journal of Business, Human and Social Sciences:62626", author = "Ying-Hsiu Chen and Pao-Peng Hsu and Mou-Yuan Liao and Shu-Min Hsieh", title = "The Effect of Risky Assets to Operating Efficiencies for Listed Securities Firms in Taiwan Using the Data Envelopment Analysis", abstract = "This paper employs a the variable returns to scale DEA
model to take account of risky assets and estimate the operating
efficiencies for the 21 domestic listed securities firms during the
period 2005-2009. Evidence is found that on average the brokerage
securities firms- operating efficiencies are better than integrated
securities firms. Evidence is also found that the technical inefficiency
from inappropriate management constitutes the main source of the
operating inefficiency for both types of securities firms. Moreover, the
scale economies prevail in brokerage and integrated securities firms,
in other words, which exhibit the characteristic of increasing returns to
scale.", keywords = "Data Envelopment Analysis, Risky Assets, PureTechnical Efficiency, Scale Efficiency, Scale Economies.", volume = "4", number = "5", pages = "578-4", }
