Ownership and production efficiency: Evidence from Taiwanese banks |
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| Authors: | Yang Li Professor Jin-Li Hu Associate Professor Yung-Ho Chiu Professor |
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| Affiliation: | 1. Institute of Economics and Management , National University of Kaohsiung , Taiwan;2. Institute of Business and Management , National Chiao-Tung University;3. Department of Economics , Soochow University , Taiwan |
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| Abstract: | In the early 1990s, Taiwan began her deregulation trend in order to enhance competition and economic efficiency across all industries. We derive a theoretical framework to predict possible rankings in technical efficiencies of public, mixed, and private banks. A panel data set with 43 Taiwanese banks during 1997–1999 is used for empirical analysis. We then apply a translog distance function to estimate technical efficiencies. The relationship between technical efficiency and government shareholding is also examined. Empirical results show that a public bank in Taiwan can improve its technical efficiency by mixed ownership at a diminishing rate. Moreover, banks in Taiwan on average performed worse after the 1997 Asian financial crisis. |
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