Capital structure and cost efficiency in the Taiwanese banking industry

By utilizing a sample of 44 Taiwanese banks, this study analyses whether banks can mitigate agency costs, to increase firm performance through optimization of capital structure. The stochastic frontier approach is adopted to determine cost efficiency as the firm performance indicator, an approach that is capable of controlling outside environmental factors. Furthermore, this study uses two-stage least squares to estimate two simultaneous equations that are then used to examine the relationship between capital structure and firm performance. This study includes indicators of ownership structure. The main results are: first, optimal capital structure is selected by the manager to combat the agency problem and thus improve performance, yielding results consistent with agency theory; and second, reducing managerial share ownership will decrease agency cost and increase firm performance, a finding that is consistent with the Entrenchment Hypothesis.     

Cross-buying evaluations in the retail banking industry

Is a customer’s past purchase experience of traditional banking products applicable to the continuing purchase of insurance and investment products at a bank branch? Are service attributes used with similar extensions evaluated differently from when used with dissimilar extensions? In response to these questions, this study develops and examines a framework of service attributes (e.g., locational and one-stop shopping convenience, functional and technical service quality, and firm reputation and size) having positive effects on cross-buying. Meanwhile, this study also examines the mediating roles of satisfaction and trust on the relationship between services attributes and cross-buying. Our results indicate that the relative importance of locational convenience and functional service quality is likely to decline, while the relative importance of one-stop shopping convenience and firm size is likely to increase as category dissimilarity increases. Technical service quality and firm reputation only have indirect effects on cross-buying dissimilar product categories through trust. Instead, satisfaction plays the mediating role for cross-buying similar product categories. Our findings reinforce the view that the relative effects of service attributes, satisfaction and trust on cross-buying vary under different category similarity conditions.     

Configuration of innovation and performance in the service industry: evidence from the Taiwanese hotel industry

This study attempts to state some facts about the importance of innovation in the service economy, and especially the hotel industry by classifying the configurations of innovation in Taiwanese hotels, as well as considering the types of innovation configuration that will maximise performance. Technological innovation, organisational innovation, and human capital innovation may be key sources of innovation. This study classified the configurations of innovation based on several innovation activities with two-step cluster analysis. Numerous empirical findings facilitate improved understanding of the relationship between the configurations of innovation and firm performance in the Taiwanese hotel industry.     

国际银行业并购理论及原因分析

全球银行业并购浪潮有其深刻的原因，从根本上说是经济发展到一定阶段的必然产物。是银行为了追求利润最大化的目标和迫于市场竞争压力所致。本从银行并购的理论出发，深入探究了国际银行业并购的内在与外在动因。     

加入WTO对我国银行业监管工作的挑战

加入世贸组织后,我国金融业所面临的是全方位对外开放的新格局,外资银行的进入速度将不断加快,与中资银行展开全方位的竞争,这不仅对我国银行业是一个巨大的挑战,而且对我国中央银行的监管工作也提出了前所未有的挑战。因此,如何正视我国中央银行在监管工作中存在的差距和问题,从不断提高银行监管工作水平、促进银行业长期稳定发展出发,深入研究建立既符合我国国情,又适应现代银行业发展要求,且与国际金融监管惯例和规则接轨的现代金融监管体系,是目前我国银行监管工作迫切需要解决的一个现实问题。一、我国银行监管的现状、存在的主要问题…     

Identifying multi-channel value co-creator groups in the banking industry

The purpose of this paper is providing a value co-creation management framework in the banking industry using the data analysis. Moreover, a multi-channel segmentation approach will be developed in order to identify customer segments based on the use of each channel. Managing value co-creation can be defined as determining the channel that may be used by the customer and the kinds of encounters that lie in these channels to have different impacts on the customer for various types of encounters. The model is built on the basis of the related literature and the collaboration of a Customer Relationship Manager in a large bank in Iran. Then, a multi-channel segmentation model is developed based on the RFM variables of the five banking channels for each customer. Next, about 11,000 customers of the bank is segmented by comparing the k-means and DBSCAN algorithms. Finally, by adapting customer segments on the value co-creation framework, three general groups are identified based on the type of encounter that lies in each channel. Moreover, twenty-seven small groups are recognized based on the desirability of the customer use of the channels.     

Determinants of efficiency in South East Asian banking

This paper explores the efficiency of banks in five South East Asian countries (Indonesia, Malaysia, the Philippines, Thailand, and Vietnam) using the non-parametric data envelopment approach and Tobit regression. The results indicate that efficiency has significantly declined over the period 1998–2004 indicating that the post-1997 crisis restructuring had a negative influence on bank performance. In line with the established literature on emerging markets, foreign banks appear to be more efficient than the domestic counterparts. However, state-owned banks exhibited greater efficiency than their local private sector peers. Among country-level factors, national banking development shows a strong and positive link with bank efficiency. The results are robust to different assumptions of bank inputs, outputs, technological changes, and national banking convergence.     

Ownership and production efficiency: Evidence from Taiwanese banks

In the early 1990s, Taiwan began her deregulation trend in order to enhance competition and economic efficiency across all industries. We derive a theoretical framework to predict possible rankings in technical efficiencies of public, mixed, and private banks. A panel data set with 43 Taiwanese banks during 1997–1999 is used for empirical analysis. We then apply a translog distance function to estimate technical efficiencies. The relationship between technical efficiency and government shareholding is also examined. Empirical results show that a public bank in Taiwan can improve its technical efficiency by mixed ownership at a diminishing rate. Moreover, banks in Taiwan on average performed worse after the 1997 Asian financial crisis.     

基于数据包络分析方法的中国银行业的效率研究

为了研究提高商业银行的经营管理效率,促进银行业的健康发展,本文采用数据包络分析方法对15家样本商业银行进行效率测度,这15家商业银行来自于构成中国商业银行领域的三个不同类别,通过三类商业银行间的比较,为国内商业银行业的效率研究提供更为科学全面的信息。     

Risk-taking behaviour and ownership in the banking industry: The Spanish evidence

This paper analyses the determinants of risk-taking in Spanish financial intermediaries, with special emphasis on the ownership structure and size of the different entities. On the one hand, the specific legal configuration of Spanish Savings banks may lead them to differ from Commercial banks in their risk behaviour. In particular, they may invest in riskier projects. Nevertheless, other theories indicate that greater stockholder control in Commercial banks may induce them towards greater risk-taking in certain situations. In this paper we test these hypotheses with a dynamic panel data model (1993–2000) for Spanish Commercial banks and Savings banks. We analyse whether differences in risk behaviour are related to different ownership structures or to other factors such as the size of the entity.     

The impact of mergers in banking : Evidence from a nationwide sample of federally chartered banks

Spurred by deregulation, cost, and risk factors, commercial bank mergers have accelerated sharply in recent years. Many banks appear to be positioning themselves for the advent of interstate banking through holding company or reciprocal branching arrangements. Yet, the performance effects of mergers among operating U.S. banks (as opposed to holding company acquisitions) have been examined both infrequently and inconclusively. This study focuses upon the characteristics and performance effects of national bank mergers occurring during the 1970–1980 period. Acquiring national banks were found to have lower operating efficiency and productivity than nonmerging banks and their profitability did not increase following the mergers, but credit availability, productivity, loan losses, deposit service charges, and interest-rate risk did rise. Frequency of merger activity did not significantly influence bank profitability or growth, but did augment stockholder risks and increase business and real-estate credit. In the aggregate, national bank mergers appeared to result neither in significant service benefits nor in significant service costs to the public.Spurred by deregulation of the industry, rising cost pressures, and increased operating risk, merger transactions among U.S. banks have soared in recent years. During the 1982–1986 period, for example, banking led all other industries in the number of consummated mergers and consistently was among the ten leading U.S. industries in the estimated market value of merger agreements. Moreover, the recent upsurge in reciprocal interstate banking agreements and proposals for fully legalized interstate banking hold out the prospect for a further acceleration in bank merger transactions in the years ahead. In view of the fact that legislation in more than 30 states now permits some form of interstate banking by merger or de novo entry and a June 1985 ruling of the U.S. Supreme Court has legitimized regional banking compacts, the public and private impact of bank mergers becomes of much greater importance as a research focus.Despite the magnitude of recent bank merger transactions and their implications for the public, the research literature in this area is surprisingly meager and often contradictory. This article is an attempt to focus more sharply on recent research findings, provide additional evidence concerning the effects of mergers on the financial performance of banks, and assess their impact on the public's interest in an adequate supply of financial services.     

Cost of small business banking: a New Zealand study

The research reported in this article develops a model for assessing the cost of banking services faced by small businesses. The lack of price competition in the provision of small business banking services combined with limited transparency concerning actual fee levels prevents small businesses from readily estimating likely fee levels. Prior research and government reports note the difficulties faced by small business in relation to banking services and this research contributes to an understanding of the potential dead weight losses incurred resulting from poor signalling and information asymmetry and potentially a deficient public policy framework.

Establishment of a performance-evaluation model for service quality in the banking industry

The study addresses the problem of service quality in the banking industry by modifying an importance–satisfaction (I–S) model in order to develop an integrated performance-measurement model for the banking industry, which would enable the priority of items for improvement to be determined. An importance and satisfaction questionnaire has been provided to determine which items do not fall into the appropriate performance-control zone of the performance-control matrix of the model. The performance-control matrix index provided enables the value of certain improvement objectives to be calculated. Finally, quality loss function is then adopted to rank the improvement objectives in terms of priority. A case study of a Taiwanese bank is then presented to demonstrate the applicability of the model in practice. The study thus presents a complete assessment model that helps managers to identify items for improvement, while simultaneously promoting cost and time efficiencies in service processes.     

Cross-border mergers and market concentration in a vertically related industry: theory and evidence

We present a tractable model of oligopoly to identify the linkages between local competition and cross-border mergers in a vertically related industry. We show that the incentives for cross-border mergers rise with vertical integration in an industry when the premerger concentration in that industry is sufficiently high relative to the concentration in the same industry in a foreign country. We also show that the incentives for a merger between a foreign firm and a vertically integrated home firm will be higher than that for a merger between a foreign firm and a disintegrated home firm, when the premerger concentration at home is low relative to the premerger concentration in the foreign country. We then analyze a firm-level panel of 90,614 M&A observations, between 1990 and 2012, from 86 countries. Logistic regressions confirm that market concentration is an important determinant of cross-border M&A. Our results support the conjectures of our theoretical model and are consistent with recent empirical findings and theoretical predictions.     

Financial reforms in Chinese banking: The impact on personal lending and operational efficiency

The Chinese financial system has historically been one of secrecy, distrust, and corruption. The process does not align with the western standards of transparency and auditing. In contrast to the transaction-based business culture of the West, Chinese business society is relationship-based (quanxi), which still seems to play a key role in the credit decision. With the growth of the emerging middle class, access to financial instruments such as credit cards, life insurance, stock purchases, and the like will play a greater role in the life of the Chinese consumer. Based on these forecasts, the authors recommend seven actions to manage financial activities in China, all of which are explored within this article.     

Dynamic efficiency assessment of the Chinese hotel industry

The paper introduces for the first time a totally dynamic two-stage approach to analyzing the hotel industry's technical efficiency at the sub-national level. The first stage uses data envelopment window analysis (DEWA) to assess regional hotel sectors' technical efficiency over time. Unlike previous studies, the second stage uses a dynamic Tobit model to investigate the impact of macro contextual factors on the hotel sector efficiency. The study chooses the Chinese hotel industry during the period 2001-2006 as its application setting. The findings of the investigation indicate that the Chinese hotel industry is approaching an efficient operation in general, recovering from a major dip in 2003 resulting from the Severe Acute Respiratory Syndrome (SARS) outbreak. In addition, the study introduces a novel two-dimensional efficiency-based matrix to assess the competitive advantage of different regions of the Chinese hotel sector. The paper presents strategic market implications for hoteliers, government decision-makers, and destination management organizations. The proposed methods are applicable for situations in which an exogenous event of a destabilizing impact (e.g., SARS) does occur.     

The nexus between competition and efficiency: The European banking industries experience

In this paper, we investigate competition in banking systems in the EU27 as a whole for the period 2004–2010, but also for old members’ banking systems compared with new members’ banking systems and for banking systems from countries member of euro zone compares with banking systems from countries non-member of euro zone. In order to investigate this issue, we estimate a non-structural indicator of banking competition, using the H-statistic indicator that is estimated using bank-level data. Also, we apply two tests of convergence, β- and σ-convergence, for assessing competition evolution during the specified period. We want to fill the gap in the banking literature testing the validity of the Competition–Efficiency Hypothesis, analysing the impact of the banking competition measures on two alternative measures of efficiency, cost and profit efficiency, in the European banking systems in a Granger-causality manner. The results confirm us that in the EU the convergence process occur from the banking systems with higher competition level than the mean score of all countries. The evidence for all groups of countries, except non-euro zone group, where results are not statistically significant, confirm the Competition–Efficiency Hypothesis in terms of cost and profit efficiency.     

Making customer relationship management work: evidence from the banking industry in Taiwan

Soon after becoming a WTO member, Taiwan found the internationalisation and liberalisation in the financial industry ushered its domestic banks into a new era. In response to this global trend, all its banks strove to rely on customer relationship management (CRM) to enhance customer value (CV). This study aims to probe further into the connection between CV and CRM. A series of examinations revealed that (1) both functional and social value impact customer behaviour directly and positively; (2) customer satisfaction positively and directly affects customer loyalty; (3) a positive and direct relationship exists between customer loyalty and customer behaviour; and (4) the positive and significant relationship between CV and customer behaviour can be developed through mediators such as customer satisfaction and customer loyalty. Consequently, banks should offer their customers different services, products, and marketing channels to meet their diversified needs to cultivate a win-win environment of CRM for both parties.     

Customer-driven philosophy in the banking industry under different ownership status: the case of Greece

Relationship banking (RB) philosophy has become a topic of increasing importance in strategic marketing management. RB concerns inter alia the applying of customer-driven strategies using advanced information technology. This study investigates RB in the Greek banking industry overall and also under different ownership status (privately owned vs. stated-controlled vs. foreign banks). Based on a wide field of research during the period 2005–2006, indeed, we find that banks in Greece apply the philosophy of RB; however, privately owned and foreign banks implement RB strategies more systematically and effectively in comparison with state-controlled banks. The usefulness of our results is twofold: they satisfactorily justify the considerable growth of the private banking sector in the Greek economy and significantly enrich the service-profit chain of this specific industry.