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Although the business environment is stochastic, deterministic data envelopment analysis (DEA) models are typically used to measure the efficiency of commercial banks for the purpose of simplicity. Bank operations are characterized by a network structure due to the dual role of deposits, which, on the one hand, are the output of the process of borrowing funds from depositors and, on the other hand, are the input of the process of making loans. Since the outputs of the production process of the bank are correlated with its inputs, the model for measuring efficiency in this case is a stochastic program with correlated data. To take the correlation between the inputs and outputs into consideration, in this paper, a standard normal transformation is applied for the correlated data, and a network stochastic model is developed to obtain the distribution of the stochastic efficiency. The model is used to measure the efficiency of twenty-two commercial banks in Taiwan. The results are more reliable, discriminative, and informative than those obtained from the existing models. They also show that the performance of a bank is mainly affected by its loan performance. Different from the stereotype suggesting that private companies usually operate more efficiently than state-owned companies, public banks perform better than private banks in Taiwan. [ABSTRACT FROM AUTHOR]

The purpose of this research is to introduce an innovative decision architecture to assess corporate risks by utilizing accounting narratives and to further examine the association between those risks and operating performance. We run text mining algorithms to identify the types of risks from narratives and incorporate them with a readability measure (i.e., linguistic cue(s)) to conjecture a firm manager's attitude toward corporate risk. We consider a two-stage network data envelopment analysis (TNDEA) with the benefit of opening up the black-box of a production process via considering internal activities. The outcome derived from TNDEA is determined by users who decide "a priori" what the specification of the model should be, without considering any alternatives. The study further incorporates the fuzzy rough set theory (FRST) with TNDEA by considering inclusion/exclusion or different combinations of inputs, intermediates, and outputs so as to realize a corporate's underlying business situation. Decision attributes taken from the outcome of FRST-TNDEA and condition attributes gathered from annual reports are jointly inserted into an artificial intelligence (AI) technique to establish the forecasting model. The integrated circuit (IC) industry has long been viewed as an essential backbone of Taiwan's economy, and therefore it is taken as our research target. The results show that the introduced linguistic cues have positive and considerable impacts on firm performance. Overall, the findings herein provide direct support for recent regulators that require corporates to add a new section on risk factors in accounting narratives so as to prevent users from making biased judgments. [ABSTRACT FROM AUTHOR]

Following the emergence of the Internet, the Internet of things (IOT) brought about another wave of technological and economic revolutions. Through the lens of the production process, this study utilises the dynamic network slack-based measure model in data envelopment analysis to evaluate 32 IOT companies in Taiwan in terms of their innovation efficiency, operational efficiency and overall efficiency for the period of 2007–2017. Empirical results reveal that the average operational and overall efficiencies of IOT companies in Taiwan have been decreasing considerably since 2008. However, their average innovation efficiency remains stable over the sample period owing to government reductions in enterprise research and development (R&D) tax credit incentives. Through the impulse response function method, this study further confirms that the Statute for Industrial Innovation, which was implemented in 2010 and revised and reimplemented in 2016, specifically, policies concerning enterprise R&D tax credits, affect the efficiencies of IOT companies in Taiwan. Overall, this study reveals the performance evaluation process of IOT companies by showing that their innovation capability affects their operational efficiency. Thus, the government is advised to incorporate innovation measures into relevant industrial policies to achieve policy effectiveness. [ABSTRACT FROM AUTHOR]