Chia-Chi Lee

Application of DEA in analyzing a bank's operating performance

This article takes 117 branches of a certain bank in Taiwan in 2006 as the research subject and introduces data envelopment analysis (DEA) to evaluate the operating performances of business units of this bank to provide the reference for a banks managers in determining operation strategies. The result indicates that, in overall technical efficiency, the case bank has many inefficient branches distinctly; the average overall technical efficiency of branches is 54.8% and the average pure technical efficiency of branches is 67%, which is probably because of lower loan-to-deposit ratio, leading to excessive input waste. The average scale efficiency of the case bank during the sample period is 82%. The ratio of resource waste due to technical inefficiency is 45.2%, of which 55.03% is due to pure technical inefficiency.

A learning performance evaluation with benchmarking concept for English writing courses

This paper adopts data envelopment analysis (DEA), a robust and reliable evaluation method widely applied in various fields to explore the key indicators contributing to the learning performance of English freshmen writing courses in a university of Taiwan from the academic year 2004 to 2006. The results of DEA model applied in learning performance change our original viewpoint and reveal that some decision-making units (DMUs) with higher actual values of inputs and outputs have lower efficiency because the relative efficiency of each DMU is measured by their distance to the efficiency frontier. DMUs may refer to different facet reference sets according to their actual values located in lower or higher ranges. In the managerial strategy of educational field, the paper can encourage inefficient DMUs to always compare themselves with efficient DMUs in their range and make improvement little by little. The results of DEA model can also give clear indicators and the percentage of which input and output items to improve. The paper also demonstrates that the benchmarking characteristics of the DEA model can automatically segment all the DMUs into different levels based on the indicators fed into the performance evaluation mechanism. The efficient DMUs on the frontier curve can be considered as the boundaries of the classification which are systematically defined by the DEA model according to the statistic distribution.

Convertible Bonds Issuance Terms, Management Forecasts, and Earnings Management: Evidence from Taiwan Market

Convertible bond (CB) issuers have been required to include financial forecasts in prospectuses filed with the Taiwan Securities and Futures Commission (TSFC) since 1991. This study examines the association between CB issuance terms and the extent of optimistic initial earnings forecasts and earnings management, as well as the association between CB issuance terms and the extent of reported (post-managed) earnings forecasts. Empirical results indicate that: (1) the likelihood of the issuing company making an optimistic initial earnings forecast (positive initial forecast error) increases with conversion price, issuance amount, and issuance period, but decreases with an increasing conversion period and reselling premium; (2) earnings management was pervasive in the year of issue of the CB; and (3) a substitutive relation exists between earnings management and issuance terms in CB issuing.

Impacts of the borrower's attributes, loan contract contents, and collateral characteristics on mortgage loan default

This paper explores the factors influencing mortgage loan default and default probability by using the data from the mortgage loans of a case financial institution. The results indicate that the borrowers gender, the borrowers job position, whether the regional codes of the borrowers present residence and registered permanent residence are the same, the degree of relationship between the borrower and the guarantor, the loan-to-value ratio, the use status of collateral, and the located region of collateral are significantly positively correlated with the default probability. However, the education degree and the loan amount are significantly negatively correlated with the default probability.

The optimal operational risk capital requirement by applying the advanced measurement approach

The purpose of this paper is to construct a risk quantification model to achieve the accurate operational risk management and gain the satisfying estimation and control of future possible extreme losses by using capital charges to assess operational risk. The paper takes a case bank as the research object and compares the differences under various circumstances engaging the Basic Indicator Approach, the Standardized Approach, and the Advanced Measurement Approach for the operational risk capital requirement of a bank. The results indicate that it is more appropriate to adopt the Advanced Measurement Approach to estimate the operational risk capital requirement; this way can help a bank enjoy a much lessened capital charge required and subsequently its available capital increases. Hence, it allows a bank to have sufficient funds in operations and reduce the burden of capital costs. Therefore, it will bring the positive benefits to the whole banking industry when enforcing the Advanced Measurement Approach.

The determinants of mortgage defaults and prepayments

This paper applies the logistic regression models and performs an empirical study by dividing the factors that affect defaults and prepayments into the personal factors of the borrowers (including whether the borrowers provide sources of repayments, sexes, ages, and marital statuses), contract terms (including loan maturities, loan amounts, interest rates, percentage of loans against collaterals), and external factors (such as the number of times when the real estate price indexes going up and down). According to the empirical findings, the factors that have significant influences on defaults are the provision of repayment sources (negative), borrowing interest rates (positive), the percentage of loans (positive), marital statuses (negative), the number of times when the real estate price indexes going up (positive), and the number of times when the real estate price indexes going down (negative); the factors that have significant influences on prepayments are the provision of repayment sources (negative), loan maturities (positive), borrowing interest rates (positive), the number of times when the real estate price indexes going up (negative), and the number of times when the real estate price indexes going down (positive).

A performance management on automobile dealers with applying data envelopment analysis

This paper analyzes the operating performances of the twenty retailers of two Taiwanese automobile dealers based on the data envelopment analysis combined with the practical experience of the automotive industry. The paper selects important input and output variables to evaluate overall technical efficiency, pure technical efficiency, and scale efficiency for detecting the causes of inefficiency and proposes the improvement comments on project management. The results indicate that there are five retailers presenting relative efficiency at overall technical efficiency during the sample period. The paper looks forward to constructing a complete business operating performance model for enhancing the performances of retailers. The findings can provide useful suggestions for the managers of project management to focus on how to find out and develop the maximum effectiveness by allocating useful human resources fitly for enhancing the operating efficiency on performance management.

The project management of the profit contribution from the customers of mobile virtual private network services

This paper aims to probe into the mobile virtual private network (MVPN) and analyzes the impact of project management on the profit contribution of a case mobile company. An empirical model is constructed based on multiple regressions. The dependent variable is the profit contribution from each of six major corporate customers of MVPN services of the case mobile company; independent variables include the service benefits of MVPN services, whether the preferential price of mobile phone is offered by the case mobile company, the monthly mobile bill discount provided by the case mobile company, and the monthly mobile bill subsidy amount offered by corporations to their employees. The empirical results can establish a core business strategy on customer value proposition and identify the best market segment to enhance the profitability and sustainable growth in order to increase the case mobile companys market competitiveness and business performance.

The Determinants of the Operational Performance for Food Ingredient Suppliers

This paper aims to analyze the factors that influence customer profit contribution for a food ingredient supplier by using a case study. A total of 644 corporate clients of this supplier are sampled from January 2007 to December 2009. By running a multiple regression model, this paper conducts an empirical analysis in order to understand the factors that influence the customer profit contribution. It is hoped that the research findings can provide a reference for the management of the supplier in question. The results show that prices, credit days, and transportation distance are negatively correlated with the customer profit contribution. All of the other factors such as the percentage of compound products, customer loyalty, and business intensity are all positively correlated with the customer profit contribution. This paper can serve as a reference to food ingredient suppliers for risk management, the planning of working capital, business strategies, revenue targets, and customer loyalty. This can also assist suppliers in the adjustment of supply chains in order to pursue sustainable growth in a highly competitive market.

Application of real options model in multiple-stage acquisition strategies

This paper aims to examine the criteria for strategy formulation in the consideration of potential acquisition values in a multiple-stage acquisition process. This paper uses a case study to attempt to construct the valuation of a reasonable acquisition value based on the real options method. The implied potential value measured in different stages of horizontal acquisitions is referred to as the basis to decide the best strategies and the choice of exits, and to determine the optimal acquisition price in negotiations. Comparing with the traditional valuation methods, it demonstrates more flexibility in the negotiation mechanism in the multiple-stage acquisition and that can protect the optimal price for both parties.