Operational and investment efficiency of investment trust companies: Do foreign firms outperform domestic firms?

Date
2022-12
Authors
Nourani, Mohammad
Kweh, Qian Long
Lu, Wen-Min
Gurrib, Ikhlaas
Journal Title
Journal ISSN
Volume Title
Publisher
Springer Science and Business Media Deutschland GmbH
Abstract
This study examines the efficiency of investment trust companies (ITCs) from 2011 to 2020 using a meta-frontier two-stage network data envelopment analysis (DEA) based on the directional distance function (DDF). We improved the accuracy of the efficiency measurement and added a network-based ranking component to rank the top-performing entities. In the group-specific technology assessment, foreign ITCs excel in investment efficiency. Meanwhile, in the meta-technology assessment, domestic ITCs outperform foreign ITCs in terms of both investment and operational efficiencies. Group-specific technology efficiency scores were found to be lower than or equal to the meta-technology efficiency scores for both the operational and investment stages. Based on the network-based ranking approach, Yuan Ta, a domestic ITC that ranked fourth in the operational stage and first in the investment stage, can be used as a reliable benchmark. This study will enable practitioners to gain a better understanding of the performance of ITCs operating under heterogeneous technologies. © 2022, The Author(s).
Description
This work is licensed under Creative Commons License and full text is openly accessible in CUD Digital Repository. The version of the scholarly record of this article is published in Financial Innovation (2022), available online at: https://doi.org/10.1186/s40854-022-00382-1
Keywords
Data envelopment analysis, Directional distance function, Investment trust companies, Metafrontier two-stage network, Network-based ranking
Citation
Nourani, M., Kweh, Q. L., Lu, W. -., & Gurrib, I. (2022). Operational and investment efficiency of investment trust companies: Do foreign firms outperform domestic firms? Financial Innovation, 8(1). https://doi.org/10.1186/s40854-022-00382-1