Evaluating Operational Efficiency after Merger and Acquisitions of Commercial Bank in Taiwan Using DEA Model

[[abstract]]In recent years, financial liberalization, globalization and internationalization make commercial banks more important role ever before. The government not only makes a healthy financial environment but also improve competitive ability. For the purpose, merger and acquisitions be a future towards. The study uses Data Evaluation Analysis model to evaluate the performance between M&A in banks over the period 2003-2005. The input variables chosen include interest expenses, operating expenses; the out put variables include interest income, operating profit, and earning before interest and taxes. We have chosen 8 banks among M&A cases of 2003 as the sample. The purpose of this research is whether M&A is good or not, how changes in ?Total Efficiency?, ?Technology Efficiency? and ?Scale Efficiency?. And resource is allocated in no risks. The results of this research as follows? (1)In ?total efficiency?, M&A is not probably good way to evaluate banks in no risks. (2)In ?pure technology efficiency? and ?scale efficiency?, ?technology inefficiency? resulting from ?pure technology inefficiency?, could be improved by optimum input and output. ?Technology inefficiency? resulting from ?scale inefficiency?, could be improved by increasing scale. (3)In Slack Analysis, how to allocate recourses to avoid unused and wasted. And the operational efficiency could be improved in ?total efficiency? and ?pure technology efficiency?. ?Scale efficiency? shows decreasing return, but it are not significant