Estimating the Influences of Financial Crisis and Diversification on Efficiencies for Taiwan ’ s Listed Securities Firms using the Two - Stage DEA Model

Abstract

This paper adopts twostage Data Envelopment Analysis (DEA) taking account of operating risks, to examine the impact of global financial crisis on efficiencies and the existence of the efficiency improvements from revenue diversification. We use unbalanced panel data on 21 of Taiwan’s listed securities firms during the period 2005-2010. Three main empirical results are obtained in this paper. First, the pure technical efficiency from inappropriate management constitutes the main source of the operating inefficiency. Second, the scale economies prevail in the majority of securities firms. Finally, the global financial crisis induces a decrease in scale efficiency and the increase of revenue diversification improves pure technical efficiency, but the raise of revenue diversification during global financial crisis reduces the damage of scale efficiency caused by global financial crisis. Keywords—Data Envelopment Analysis, Tobit Model, Financial Crisis, Diversification, Efficiency, Scale Economies

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Cite this paper

@inproceedings{ChenEstimatingTI, title={Estimating the Influences of Financial Crisis and Diversification on Efficiencies for Taiwan ’ s Listed Securities Firms using the Two - Stage DEA Model}, author={Ying-Hsiu Chen} }