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An Empirical Analysis of Bank Mergers and Cost Efficiency in Taiwan

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  • Ping-wen Lin

Abstract

This study compiled input and output panel data of 46 commercial banks in Taiwan during the period from 1997 to 1999 and used the two-stage method to evaluate the effects of bank mergers on bank efficiency. Generally speaking, a bank’s cost efficiency would be improved if the bank mergers happened between banks with different culture backgrounds. On the other hand, if the mergers happened between homogeneous banks, there would be little financial innovation and the cost efficiency would be unsubstantially improved. Another finding is that small banks have superior performance than larger banks in Taiwan. Also, efficiency would seem to dictate against merger mania. Copyright Springer 2005

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  • Ping-wen Lin, 2005. "An Empirical Analysis of Bank Mergers and Cost Efficiency in Taiwan," Small Business Economics, Springer, vol. 25(2), pages 197-206, September.
    • Handle: RePEc:kap:sbusec:v:25:y:2005:i:2:p:197-206
    DOI: 10.1007/s11187-003-6451-y
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    References listed on IDEAS

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    1. Thomas F. Siems, 1992. "Quantifying management's role in bank survival," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q I, pages 29-41.
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    Cited by:

    1. Reddy, Kotapati Srinivasa & Nangia, Vinay Kumar & Agrawal, Rajat, 2013. "Indian economic-policy reforms, bank mergers, and lawful proposals: The ex-ante and ex-post ‘lookup’," Journal of Policy Modeling, Elsevier, vol. 35(4), pages 601-622.
    2. Arturo Haro-de-Rosario & Mª del Caba-Pérez & Leonardo Cazorla-Papis, 2014. "Efficiency of venture capital firms: evidence from Spain," Small Business Economics, Springer, vol. 43(1), pages 229-243, June.
    3. Mei-Ying Huang & Tsu-Tan Fu, 2013. "An examination of the cost efficiency of banks in Taiwan and China using the metafrontier cost function," Journal of Productivity Analysis, Springer, vol. 40(3), pages 387-406, December.
    4. Juo, Jia-Ching & Fu, Tsu-Tan & Yu, Ming-Miin & Lin, Yu-Hui, 2016. "Non-radial profit performance: An application to Taiwanese banks," Omega, Elsevier, vol. 65(C), pages 111-121.
    5. Dan Luo & Shujie Yao, 2009. "World Financial Crisis and the Rise of Chinese Commercial Banks," Discussion Papers 09/08, University of Nottingham, GEP.
    6. Abayomi Oredegbe, 2021. "Cost Efficiency Determinants: Evidence from the Canadian Banking Industry," International Journal of Business and Management, Canadian Center of Science and Education, vol. 15(1), pages 1-86, July.

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