An Explanation for the Paradox Phenomenon in Taiwan’s Bank Performances

Ming-Chung Chang


A traditional DEA (data envelopment analysis) model is useful for estimating the best performances for a successful and a more efficiency DMU (decision-making unit). This study uses a traditional DEA model to estimate the efficiency score of bank z in Taiwan and get a good efficiency score based on the 2006 data, however the bank z was taken over by the government in early 2007. In illustrating this paradox phenomenon, the study reconsiders the tradition DEA model by contributing a worst-practice frontier under a traditional DEA model. Findings: the bank z is located on the intersection of the worst-practice frontier and the traditional DEA model frontier. This study provides a critical determinant of a bank’s failure that a bank has a location such as the bank z.

Full Text:



This journal is licensed under a Creative Commons Attribution 4.0 License.

International Journal of Financial Research
ISSN 1923-4023(Print)ISSN 1923-4031(Online)


Copyright © Sciedu Press

To make sure that you can receive messages from us, please add the '' domain to your e-mail 'safe list'. If you do not receive e-mail in your 'inbox', check your 'bulk mail' or 'junk mail' folders.