This paper generalizes Berg and Kim (1998) to incorporateinput-oriented technical efficiency in a dual cost function. Undernon-competitive market structure, a profit maximizing bank equates itsperceived marginal revenues, which include expected reactions fromother banks, to its efficiency-adjusted marginal costs for eachoutput. Empirical results using the data from Taiwan's bankingindustry suggest that the banking market be characterized bysubstantial strategic interaction. Employing multiple comparisons withthe best (MCB) procedure, we construct the joint confidence intervalsof relative economic efficiency for each sample bank. Those MCBconfidence intervals extend Horrace and Schmidt (1996, 2000) from aproduction frontier to a more general cost frontier, and identifymultiple best-practice banks from the sample.
亞洲生產力與效率國際會議論文集=Proceedings of Asia Conference on Efficiency and Productivity Growth，頁N.A.(CD)