The purpose of this study is to investigate whether the ECFA impacted the efficiency of banks in China and Taiwan from 2008 to 2017. This study follows Seiford and Zhu (2002), who recommend using the standard data envelopment analysis model to measure performance by increasing the desirable outputs and decreasing the undesirables. The finding was that overall technical efficiency increased from 2012 to 2017, reaching 0.575, 0.652, 0617, 0.689, 0.701 and 0.74, respectively. This result implies bank efficiency did indeed improve after China and Taiwan signed the ECFA cooperation agreement. The study found that the mean technical efficiency was 0.8756 in China, greater than Taiwan’s mean of 0.3511, implying that Chinese banks experienced a greater increase in efficiency after signing the EFCA. One possible reason explored in this study is that China’s economy is currently growing at the highest rate in the world, and the banks’ efficiency has benefited from greater economic growth. This suggests that cross-strait sustained negotiations to consummate an agreement on trade in the services will be a very important mission in the future. This result also provides significant evidence suggesting that not accounting for undesirable output while estimating the evolution of the model may seriously distort efficiency results.

Abstract
1. Introduction
2. Background
3. Methodology
    3.1. Data Envelopment Analysis
    3.2. Empirical Regression Design
4. Empirical Results
    4.1. Results of the Banks’ Efficiency
    4.2. Results of the Banks’ Efficiency withUndesirable Outputs
    4.3. Results Compared Between Different Models
    4.4. What Are Determinants of Bank Efficiency inCross-Strait?
5. Conclusions
References

• Chang Sheng LIAO(School of Internet Economics and Business, Fujian University of Technology) Corresponding Author