A STUDY OF EFFICIENCY EVALUATION IN TAIWAN BANKS

The main contribution of this paper is empirical in nature. We use dat a envelopment analysis to evaluate the relative efficiency of 34 comme rcial banks in Taiwan. Fifteen banks are identified as efficient ones and they are divided into four sub-groups. Conversely, 19 banks are at tributed as inefficient ones and the slack analysis are followed. The inefficient banks can effectively promote resource utilization efficie ncy by better handling their labour and capital operating efficiency a nd enlarging bank investment function. In addition, we compare the dat a envelopment analysis results to the financial ratios and show that a consistent effect cannot be obtained. This is to say that we cannot d erive which bank has a higher performance from financial ratio analysi s only.