Rating the relative efficiency of financial holding companies in an emerging economy: A multiple DEA approach

Since the banking industry was liberalized in 1991, the financial holding company has become more and more competitive in Taiwan. Thus, it is an important for financial holding companies to be operated efficiently. This paper focuses on a study, which used data envelopment analysis (DEA) technique to compare the performance of 14 financial holding companies in Taiwan. We provide the conceptual model for simultaneous analysis of operating and human resource performance in this paper. The analysis models of DEA include CCR, BCC, Bilateral, Slack-Based Measure, and the FDH model. We analyze overall efficiency, pure technique efficiency and scale efficiency of the financial holding companies in Taiwan. We also use bilateral model to measure and compare efficiency between the bank-based holding companies and non bank-based holding companies. And we investigate the most productive scale size for the financial holding companies. Finally, we provide some management suggestions for the financial holding companies.