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The Discriminant Analysis on Mortgage Defaults and Decision Making between Commercial Banks and Local Banks: An Application of Decision Making Trial and Evaluation Laboratory - Factor Decomposition Method

Author

Listed:
  • Cheng-Yih Hong

    (Faculty of Finance, Chaoyang University of Technology, Taiwan,)

  • Chen-Jung Hsu

    (Department of Business Administration, Chaoyang University of Technology, Taiwan,)

  • Ching-Chun Wei

    (Faculty of Finance, Providence University, Taiwan)

Abstract

The financial crisis affected the Taiwanese economy, substantially increasing overdue loans in banks. Since commercial banks (CBs) and local banks (LBs) involve varying operational conditions, the factors contributing to their mortgage defaults might also differ. In addition, differences in organizational and financial structures exist between CBs and LBs. Both types of banks maintain different views regarding loan policies; such views are reflected in operating performance. The present study developed a DEMATEL (Decision Making Trial and Evaluation Laboratory)-FDM (Factor Decomposition Method) that could structuralize mortgage defaults to further investigate the extent of the gap between various key factors.

Suggested Citation

  • Cheng-Yih Hong & Chen-Jung Hsu & Ching-Chun Wei, 2018. "The Discriminant Analysis on Mortgage Defaults and Decision Making between Commercial Banks and Local Banks: An Application of Decision Making Trial and Evaluation Laboratory - Factor Decomposition Me," International Journal of Economics and Financial Issues, Econjournals, vol. 8(2), pages 108-112.
    • Handle: RePEc:eco:journ1:2018-02-15
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    More about this item

    Keywords

    Mortgage Defaults; Commercial Banks; Local Banks; DEMATEL- FDM;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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