The Discriminant Analysis on Mortgage Defaults and Decision Making between Commercial Banks and Local Banks: An Application of Decision Making Trial and Evaluation Laboratory - Factor Decomposition Method

Authors

  • Cheng-Yih Hong Department of Finance, Chaoyang University of Technology, Taichung, Taiwan
  • Chen-Jung Hsu
  • Ching-Chun Wei

Abstract

The financial crisis affected the Taiwanese economy, substantially increasing overdue loans in banks. Since commercial banks (CBs) and local banks (LBs) involve varying operational conditions, the factors contributing to their mortgage defaults might also differ. In addition, differences in organizational and financial structures exist between CBs and LBs. Both types of banks maintain different views regarding loan policies; such views are reflected in operating performance. The present study developed a DEMATEL (Decision Making Trial and Evaluation Laboratory)-FDM (Factor Decomposition Method) that could structuralize mortgage defaults to further investigate the extent of the gap between various key factors.

Keywords: Mortgage Defaults, Commercial Banks, Local Banks, DEMATEL- FDM

JEL Classifications: G01, G32, G41

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Author Biography

Cheng-Yih Hong, Department of Finance, Chaoyang University of Technology, Taichung, Taiwan

Cheng-Yih Hong is an associate professor in the Departmentof Finance at Chaoyang University of Technology inTaiwan. He received his Ph.D. degree in agricultureand resource economics from the University of Tokyo,Japan, in 1995. His research areas include industry correlationanalysis, service management, tourism management,monetary finance theory, agricultural economics,and East Asian regional economics.

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Published

2018-03-16

How to Cite

Hong, C.-Y., Hsu, C.-J., & Wei, C.-C. (2018). The Discriminant Analysis on Mortgage Defaults and Decision Making between Commercial Banks and Local Banks: An Application of Decision Making Trial and Evaluation Laboratory - Factor Decomposition Method. International Journal of Economics and Financial Issues, 8(2), 108–112. Retrieved from https://www.econjournals.com/index.php/ijefi/article/view/6012

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