Open AccessINFORMATION TECHNOLOGY AND RISK FACTORS FOR EVALUATING THE BANKING INDUSTRY IN THE TAIWAN: AN APPLICATION OF A VALUE CHAIN DEA
Author(s) -
Mu-Shun Wang,
Shih-Tong Lu
Publication year - 2015
Publication title -
journal of business economics and management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.485
H-Index - 37
eISSN - 1611-1699
pISSN - 2029-4433
DOI - 10.3846/16111699.2014.976255
Subject(s) - data envelopment analysis , volatility (finance) , industrial organization , economics , productivity , business , information technology , stochastic frontier analysis , enterprise value , marginal value , econometrics , production (economics) , finance , microeconomics , computer science , mathematical optimization , mathematics , macroeconomics , operating system
The main purpose of the paper is utilizing a new tool to measure the marginal benefits of information technology on productivity based upon identifying the two-stage best practice frontier. This study utilizes value-chain data envelopment analysis to investigate the effects of Information Technology and the trading activities of financial derivatives on the technical efficiency of a bank's production process through a two-stage analytical study with a firm-level data set. We find the impact of indicators related to capital adequacy ratios, exchange rate volatility, interest rate volatility, and long-term loans in relation to capital and ownership structure. Technical efficient precedes a reduction in problem loans, concentration of the operating units and developing information technology and utilization of financial derivatives. This paper provides a theoretical rationale and conceptualizing risk factors with environmental uncertainty. The innovation variables are determinants of the bank efficiency on Basel III Accord.