Modelling a shared-resource network DEA with bad output in measuring technical efficiency of banking system

DOI10.1504/IJMOR.2021.120010MaRDI QIDQ2073536zbMATH OpenOpenAlexFDO

Authors Khac Thanh Mai, Manh-Trung Phung, Bao-Ngoc Tong, Cheng-Ping Cheng, Son-Tung Le

Publication date 2 February 2022

Published in International Journal of Mathematics in Operational Research (Search for Journal in Brave)

Full work available at URL https://doi.org/10.1504/ijmor.2021.120010

zbMATH Keywords

data envelopment analysisDEAnetwork structureshared resourcesundesirable outputs

Mathematics Subject Classification ID

Management decision making, including multiple objectives (90B50) Financial applications of other theories (91G80)

Review text

Summary: This paper develops a serial three-stage network data envelopment analysis (DEA) model to estimate the efficiency of banks who transform their resources into final products, incomes. Different from previous studies, which oversimplified the banking's production, we divide it into three stages, namely, capital organisation, capital allocation, and capital turnover. The shared resources and undesirable outputs are also integrated into the evaluation framework to better reflect the nature of banking business. The novel contribution of our network structure is its ability to disclose the inefficient of each stage as well as its relative importance in the whole operation. The model is then employed to appraise the technical efficiency of 35 banks in Taiwan. Some managerial implications are offered to optimise their performance.

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(7)

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• Measuring bank performance: from static black box to dynamic network models
• A modified network DEA model for bank efficiency analysis considering risk factors

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