Benchmarking the Bank Branch Efficiency Through a New Dynamic Network DEA Model

Fu-Chiang Chen

doi:doi:10.11648/j.sjbm.20241201.11

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Benchmarking the Bank Branch Efficiency Through a New Dynamic Network DEA Model

Fu-Chiang Chen

Published in Science Journal of Business and Management (Volume 12, Issue 1)

Received: 3 December 2023 Accepted: 29 December 2023 Published: 11 January 2024

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Abstract

Evaluating the effectiveness and productivity of financial institutions has been a focal point of research for scholars, professionals, and government regulators. Considering the limited number of existing literature and the availability of segregated data from the Taiwanese banking industry, this paper enhances and uncovers how the efficiency of bank branches varies based on several characteristics, including region and location of the branch. This study proposes a new model by incorporating a carry-over input and segregating the branch production process into operational and investment divisions. Using a dataset of 121 Taiwanese branches, the findings were as follows: First, the overall efficiencies of bank branches are not on par regardless of investment or operational efficiencies. In other words, the result reveals that banking branches in Taiwan are not only far away from reaching unity in efficiency but that there are also rooms for further improvement for both types of efficiency, particularly investment efficiency. Second, the operational efficiencies of branches do not differ statistically between regions, although investment efficiencies do. Third, clustering the efficiency of branches based on characteristics provided evidence that branches located in industrial areas have a higher level of operational efficiency (and second highest investment efficiency) compared to other locations. Overall, our results emphasize that operational efficiency exhibits statistical variations across diverse locations, while there is no corresponding variability in investment efficiency within the Taiwanese banking industry. The findings contribute to a foundational understanding for researchers, practitioners, and stakeholders, paving the way for further exploration and practical applications in the dynamic landscape of financial institutions.

Published in	Science Journal of Business and Management (Volume 12, Issue 1)
DOI	10.11648/j.sjbm.20241201.11
Page(s)	1-11
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Dynamic Modelling, Data Envelopment Analysis, Operational Efficiency, Investment Efficiency, Bank Branches, Taiwan

References

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Chen, F. (2024). Benchmarking the Bank Branch Efficiency Through a New Dynamic Network DEA Model. Science Journal of Business and Management, 12(1), 1-11. https://doi.org/10.11648/j.sjbm.20241201.11

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ACS Style

Chen, F. Benchmarking the Bank Branch Efficiency Through a New Dynamic Network DEA Model. Sci. J. Bus. Manag. 2024, 12(1), 1-11. doi: 10.11648/j.sjbm.20241201.11

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Chen F. Benchmarking the Bank Branch Efficiency Through a New Dynamic Network DEA Model. Sci J Bus Manag. 2024;12(1):1-11. doi: 10.11648/j.sjbm.20241201.11

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@article{10.11648/j.sjbm.20241201.11,
  author = {Fu-Chiang Chen},
  title = {Benchmarking the Bank Branch Efficiency Through a New Dynamic Network DEA Model},
  journal = {Science Journal of Business and Management},
  volume = {12},
  number = {1},
  pages = {1-11},
  doi = {10.11648/j.sjbm.20241201.11},
  url = {https://doi.org/10.11648/j.sjbm.20241201.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.sjbm.20241201.11},
  abstract = {Evaluating the effectiveness and productivity of financial institutions has been a focal point of research for scholars, professionals, and government regulators. Considering the limited number of existing literature and the availability of segregated data from the Taiwanese banking industry, this paper enhances and uncovers how the efficiency of bank branches varies based on several characteristics, including region and location of the branch. This study proposes a new model by incorporating a carry-over input and segregating the branch production process into operational and investment divisions. Using a dataset of 121 Taiwanese branches, the findings were as follows: First, the overall efficiencies of bank branches are not on par regardless of investment or operational efficiencies. In other words, the result reveals that banking branches in Taiwan are not only far away from reaching unity in efficiency but that there are also rooms for further improvement for both types of efficiency, particularly investment efficiency. Second, the operational efficiencies of branches do not differ statistically between regions, although investment efficiencies do. Third, clustering the efficiency of branches based on characteristics provided evidence that branches located in industrial areas have a higher level of operational efficiency (and second highest investment efficiency) compared to other locations. Overall, our results emphasize that operational efficiency exhibits statistical variations across diverse locations, while there is no corresponding variability in investment efficiency within the Taiwanese banking industry. The findings contribute to a foundational understanding for researchers, practitioners, and stakeholders, paving the way for further exploration and practical applications in the dynamic landscape of financial institutions.
},
 year = {2024}
}

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TY  - JOUR
T1  - Benchmarking the Bank Branch Efficiency Through a New Dynamic Network DEA Model
AU  - Fu-Chiang Chen
Y1  - 2024/01/11
PY  - 2024
N1  - https://doi.org/10.11648/j.sjbm.20241201.11
DO  - 10.11648/j.sjbm.20241201.11
T2  - Science Journal of Business and Management
JF  - Science Journal of Business and Management
JO  - Science Journal of Business and Management
SP  - 1
EP  - 11
PB  - Science Publishing Group
SN  - 2331-0634
UR  - https://doi.org/10.11648/j.sjbm.20241201.11
AB  - Evaluating the effectiveness and productivity of financial institutions has been a focal point of research for scholars, professionals, and government regulators. Considering the limited number of existing literature and the availability of segregated data from the Taiwanese banking industry, this paper enhances and uncovers how the efficiency of bank branches varies based on several characteristics, including region and location of the branch. This study proposes a new model by incorporating a carry-over input and segregating the branch production process into operational and investment divisions. Using a dataset of 121 Taiwanese branches, the findings were as follows: First, the overall efficiencies of bank branches are not on par regardless of investment or operational efficiencies. In other words, the result reveals that banking branches in Taiwan are not only far away from reaching unity in efficiency but that there are also rooms for further improvement for both types of efficiency, particularly investment efficiency. Second, the operational efficiencies of branches do not differ statistically between regions, although investment efficiencies do. Third, clustering the efficiency of branches based on characteristics provided evidence that branches located in industrial areas have a higher level of operational efficiency (and second highest investment efficiency) compared to other locations. Overall, our results emphasize that operational efficiency exhibits statistical variations across diverse locations, while there is no corresponding variability in investment efficiency within the Taiwanese banking industry. The findings contribute to a foundational understanding for researchers, practitioners, and stakeholders, paving the way for further exploration and practical applications in the dynamic landscape of financial institutions.

VL  - 12
IS  - 1
ER  -

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Fu-Chiang Chen

Department of Accounting Information, Chihlee University of Technology, New Taipei City, Taiwan, R. O. C.

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Chen, F. (2024). Benchmarking the Bank Branch Efficiency Through a New Dynamic Network DEA Model. Science Journal of Business and Management, 12(1), 1-11. https://doi.org/10.11648/j.sjbm.20241201.11

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ACS Style

Chen, F. Benchmarking the Bank Branch Efficiency Through a New Dynamic Network DEA Model. Sci. J. Bus. Manag. 2024, 12(1), 1-11. doi: 10.11648/j.sjbm.20241201.11

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AMA Style

Chen F. Benchmarking the Bank Branch Efficiency Through a New Dynamic Network DEA Model. Sci J Bus Manag. 2024;12(1):1-11. doi: 10.11648/j.sjbm.20241201.11

Copy | Download

@article{10.11648/j.sjbm.20241201.11,
  author = {Fu-Chiang Chen},
  title = {Benchmarking the Bank Branch Efficiency Through a New Dynamic Network DEA Model},
  journal = {Science Journal of Business and Management},
  volume = {12},
  number = {1},
  pages = {1-11},
  doi = {10.11648/j.sjbm.20241201.11},
  url = {https://doi.org/10.11648/j.sjbm.20241201.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.sjbm.20241201.11},
  abstract = {Evaluating the effectiveness and productivity of financial institutions has been a focal point of research for scholars, professionals, and government regulators. Considering the limited number of existing literature and the availability of segregated data from the Taiwanese banking industry, this paper enhances and uncovers how the efficiency of bank branches varies based on several characteristics, including region and location of the branch. This study proposes a new model by incorporating a carry-over input and segregating the branch production process into operational and investment divisions. Using a dataset of 121 Taiwanese branches, the findings were as follows: First, the overall efficiencies of bank branches are not on par regardless of investment or operational efficiencies. In other words, the result reveals that banking branches in Taiwan are not only far away from reaching unity in efficiency but that there are also rooms for further improvement for both types of efficiency, particularly investment efficiency. Second, the operational efficiencies of branches do not differ statistically between regions, although investment efficiencies do. Third, clustering the efficiency of branches based on characteristics provided evidence that branches located in industrial areas have a higher level of operational efficiency (and second highest investment efficiency) compared to other locations. Overall, our results emphasize that operational efficiency exhibits statistical variations across diverse locations, while there is no corresponding variability in investment efficiency within the Taiwanese banking industry. The findings contribute to a foundational understanding for researchers, practitioners, and stakeholders, paving the way for further exploration and practical applications in the dynamic landscape of financial institutions.
},
 year = {2024}
}

Copy | Download

TY  - JOUR
T1  - Benchmarking the Bank Branch Efficiency Through a New Dynamic Network DEA Model
AU  - Fu-Chiang Chen
Y1  - 2024/01/11
PY  - 2024
N1  - https://doi.org/10.11648/j.sjbm.20241201.11
DO  - 10.11648/j.sjbm.20241201.11
T2  - Science Journal of Business and Management
JF  - Science Journal of Business and Management
JO  - Science Journal of Business and Management
SP  - 1
EP  - 11
PB  - Science Publishing Group
SN  - 2331-0634
UR  - https://doi.org/10.11648/j.sjbm.20241201.11
AB  - Evaluating the effectiveness and productivity of financial institutions has been a focal point of research for scholars, professionals, and government regulators. Considering the limited number of existing literature and the availability of segregated data from the Taiwanese banking industry, this paper enhances and uncovers how the efficiency of bank branches varies based on several characteristics, including region and location of the branch. This study proposes a new model by incorporating a carry-over input and segregating the branch production process into operational and investment divisions. Using a dataset of 121 Taiwanese branches, the findings were as follows: First, the overall efficiencies of bank branches are not on par regardless of investment or operational efficiencies. In other words, the result reveals that banking branches in Taiwan are not only far away from reaching unity in efficiency but that there are also rooms for further improvement for both types of efficiency, particularly investment efficiency. Second, the operational efficiencies of branches do not differ statistically between regions, although investment efficiencies do. Third, clustering the efficiency of branches based on characteristics provided evidence that branches located in industrial areas have a higher level of operational efficiency (and second highest investment efficiency) compared to other locations. Overall, our results emphasize that operational efficiency exhibits statistical variations across diverse locations, while there is no corresponding variability in investment efficiency within the Taiwanese banking industry. The findings contribute to a foundational understanding for researchers, practitioners, and stakeholders, paving the way for further exploration and practical applications in the dynamic landscape of financial institutions.

VL  - 12
IS  - 1
ER  -

Copy | Download