The Analysis Of Economic Efficiency Of Offshore Financial Center Construction In West Coast Of Taiwan Strait Based On DEA Method

The Economic Zone of west coast of Taiwan Strait(short for EZTS belows) is mainly including Fujian province and its' neighborhood, connects Yangtze River Delta economic zone on the north and Pearl River Delta economic zone on the south, faces the Taiwan island on the east and is bounded by Jiangxi province. As Taiwan's economic and financial cooperation Hercynian inherent advantages, as well as differences in the systems due to the inconvenience of cross-strait economic and trade exchanges, coupled with the support of national policy, the establishment of an offshore financial center in West Coast Economic Zone is imperative.Based on this background, the research of this paper is divided into the flowing parts: 1)Urgency and feasibility of establishing the economic zone offshore financial center and the reason why choosing Xiamen as the address;2)Based on the annual relevant data of Xiamen from 1997 to 2009,it evaluated the economic effect which may happen afer establishing the offshore financial center by the DEA method and the CCR model.Arround the above subjects,a literature review of the international theories of offshore financial centers have been done in this paper,which concluded the definition, classification, formation mechanism, the current situation and development prospects at home and abroad of offshore financial centers at the first.At the second it describes the the economic efficiency evaluation theory briefly,mainly on X-efficiency and DEA methods,and compares the respective merits of two methods as a theoretical support of choosing the DEA method to evaluate the potential economic efficiency of offshore financial center. Then which kind of offshore financial centers will be established in West Coast Economic Zone has been analysed,including practical significance, how to build,in which the main factors to consider are development strategy,mode selection and location selection.It focus on the reason for the selection of Xiamen in lacation choice because this paper takes Xiamen for example to prove.After explaining the theory of offshore financial centers and what kind of offshore financial centers established in West Coast Economic Zone , the theory and DEA models are described,including the theoretical background of DEA method,advantages and two classical models of CCR model and BCC model.In the part of empirical studies,the CCR model is taken for an empirica model.Based on the technial conditions remain unchanged during the time of the selected samples and the establishment and operation of offshore financial centers tends to make the DEA effective,two input indecators and four output indicators are choosed.Establishing DMU with datas from 1997 to 2009,calculating the relative efficiency of each DMU,redundancy and other parameters respectively. Through comparing and analysing economic performances afer establishing offshore financial markets and DEA can be achieved,establishing offshore financial centers impacts on economic efficieny potentially.The conclusions are as follows:The economic conditions are non-DEA efficient except 2008 and 2009 and show improvement trend gradually since 1997.During the six indicators of 11 decision making units in non-DEA efficient,the input indicator FEN(the total numbers of employment in financial and insurance in Xiamen at the end of years) hasn't appear the phenomenon of surplus labor,another input indicator TDI(Taiwan-funded used by Xiamen directly) shows serious redundancy investment.During four output indicators,GDP and TRS (retail sales per year of Xiamen)show a slight lack of output,TFT(foreign trade volume over the years of Xiamen) and DBE shows the more serious deficiencies in output,DBE is the worst.Overall,although resource allocation and utilization are improving year by year,production capacity waste seriously and lack the way to improve resource allocation and use efficiently.Therefore,it helps to improve the efficiency of investment directly by Taiwan and reduce the TDI input redundancy by avoiding the resource waste of exchange of RMB and NT. For increasing output from the output targets and reducing the rate of shortages of output,the establishment offshore financial centers can optimize funds distribution channels,increase the digest channels of purchasing power of society,provide foreign trade finance gathering center,attract more capital flows,contribute to GDP,TRS,TFT and DBE.The main contribution of this paper is the first time and nature.The performance of timeliness is the thesis is proposed and written at the time of the creation of offshore financial centers into the preparatory work.The performance of nature is it's the first time to analyse combined cases although there are some researches on establishing offshore finanical centers in Xiamen.