Banks In Taiwan Research Articles

Measuring scale and scope economies in multiproduct banking? A stochastic frontier cost function approach

Most studies on the economies of scale and scope in the banking industry assume no x-inefficiencies. That is, banks are assumed to be always on their efficient frontier, which can in empirical studies confound scale and scope efficiencies with x-efficiencies. The current paper employs a stochastic frontier cost function incorporating technical and allocative inefficiencies, as well as a system of share equations, to estimate scale and scope efficiencies. Using data from Taiwan's banking industry, evidence is found that both scale and scope economies exist, and that the assumption of no x-inefficiencies results in underestimating such economies.

Hydrographic and Satellite Observations of Summertime Upwelling in the Taiwan Strait: A Preliminary Description

Combination of the hydrographic and satellite-derived Sea Surface Temperature (SST) data provides Dew evidence for the existence of four Upwelling-related Low Temperature Zones (LTZs) in the Taiwan Strait in summer. These LTZs are located along the southwestern coast of the Taiwan Strait (SW-LTZ), along the northwestern coast of the Taiwan Strait (NW-LTZ), near the Taiwan Bank (TB-LTZ) and around the Penghu Islands (PH-LTZ), respectively. The hydrographic data from three August cruises during 1997-1999 show that these LTZs also possess relatively higher salinity (greater than 34) at the surface layer. Four years of higher resolution AVHRR satellite-derived SST data clearly indicate the summertime pattern of these upwelling-related LTZs and demonstrate their inter-annual and inter-monthly variability.

Bank Market Structure and Performance in Taiwan Before and After the 1991 Liberalization

Two competing hypotheses regarding market structure and the performance of firms are the traditional "structure-conduct-performance" (SCP) hypothesis, in which high concentration lowers the cost of collusion and earns monopoly rents, and the "efficiency" hypothesis, which emphasizes the operating efficiency of particular firms. In this paper, we present the results from testing both the hypotheses in the context of Taiwan's banking market. Our goal is to understand the effect of the 1991 liberalization policy by examining whether market structure and firm performance in this industry differ in the periods before and after the 1991 revisions to the Banking Act. Prior to the 1991 revisions, our results do not support either the SCP or the efficiency hypothesis for Taiwan's banking industry. The industry's market structure seems to exhibit a kind of "quiet-life" competing environment. The results for the period after the 1991 revisions tend to support the competing efficiency hypothesis. Our findings suggest that the 1991 revisions to the Banking Act have stimulated competition and brought about an emphasis on efficiency in Taiwan's banking industry.

Privatizing public enterprises in Taiwan's government-owned banks

The primary purpose of this study is to identify factors affecting the implementation effectiveness of Taiwan's policy to privatize its government-owned banks. The study finds that ideological and sociocultural factors are basically supportive and stable in the privatization process. Nevertheless, institutional, leadership, administrative, and political variables have become major problems that hamper the implementation of Taiwan's policy to privatize its government-owned banks.

A Parametric Estimation of Bank Efficiencies Using a Flexible Profit Function with Panel Data

This paper generalises Kumbhakar's (1996a) single product shadow profit function to a multiproduct one, which in contrast to Berger, Hancock, and Humphrey (1993) is consistent with a firm's profit maximising behaviour. By estimating a parametric translog profit function, which does not require special assumptions about the error distribution, and using panel data from Taiwan's banking industry, the following conclusions can be drawn: (i) Parameter estimates from the translog functional form are more robust than those from the Fuss (non‐logarithmic) form. (ii) More than half of all potential variable profits are found to be lost due to inefficiencies. (iii) Greater reduction in profit results from deficient output revenues than from a suboptimal input mix. (iv) The model finds technical progress during the sample period. (v) A type of ‘weakly’ optimal scope economies is detected, which suggests that the joint production of the two products can increase profits for some banks while not hurting the profits of others.

International Real Estate Review

Buying a house usually satisfies housing consumption demand and housing investment demand, simultaneously. In order to disentangle the above two types of demand, households, in this study, are separated into three subtenure groups i.e. renters, owners owning one house, and owners buying a second or more houses. Presumably, renting a house is for consumption only, while buying a second house is usually for investment purposes. Applying a two-period model and two data sets from DGBAS and from Land Bank of Taiwan, the estimated results are as follows: Firstly, the income elasticity of pure consumption demand for housing is very close to unity (1.0413). Secondly, the income elasticity for a pure investment demand is greater than one (1.2643). Finally, for a household owning only one house, the shares for consumption motive and for investment motive are 26% and 74%, respectively.

Taiwan's Current Bannking Development Strategy: Preparing for Internationalization by Preventing Insider Lending

TAIWAN'S CURRENT BANKING DEVELOPMENT STRATEGY: PREPARING FOR INTERNATIONALIZATION BY PREVENTING INSIDER LENDING Lawrence L. C. Lee* TABLE OF CONTENTS I. Introduction II. Taiwan's Emerging Banking Structure and Institutional Framework 1. Progress Towards Achieving Stability: Taiwan's Banking Regulatory Schemes .... 2. Taiwan's Banking Structure and Banking R egulators 3. Various Banking Institutions in Taiwan .... 4. Operation of Foreign Banks and Possibilities of Chinese Banks in Taiwan... III. Current Solutions to Banking Problems in Taiw an 1. Simplification and Reduction of Banking Institutions 2. Strengthening Internationalization of Taiwan's Banking System 3. Deregulation of Taiwan's Banking R egulations * Assistant Professor at Ming Chuan University School of Law (Taiwan) and Research Fellow at Columbia University School of Law. S.J.D. 1998, University of Wisconsin Law; LL.M. 1996 American University Washington College of Law; LL.M. 1993, Boston University School of Law; and LL.B. 1990, Soochow University School of Law (Taiwan). The author would like to thank Ms. Li-Chu Cheng, Deputy Director of the Division of Examination at the Bureau of Monetary Affairs, for providing updates on the development and trend of Taiwanese banking regulations and Ms. Shelby Largay for her invaluable insights to earlier draft. The author appre- ciates his parents for their support and guidance and his wife Tabatha for her unli- mited patience and support. The author is individually responsible for possible errors in this article.

A study of efficiency evaluation in Taiwan’s banks

The main contribution of this paper is empirical in nature. We use data envelopment analysis to evaluate the relative efficiency of 34 commercial banks in Taiwan. Fifteen banks are identified as efficient ones and they are divided into four sub‐groups. Conversely, 19 banks are attributed as inefficient ones and the slack analysis are followed. The inefficient banks can effectively promote resource utilization efficiency by better handling their labour and capital operating efficiency and enlarging bank investment function. In addition, we compare the data envelopment analysis results to the financial ratios and show that a consistent effect cannot be obtained. This is to say that we cannot derive which bank has a higher performance from financial ratio analysis only.

Cognitive Management System Based Support for Bank Credit Granting Decision: An Integrated and Practical Design for Taiwan

Taiwan has in recent years vigorously taken part in the international trend toward deregulation, and credit granting management for banks is currently getting a great deal of attention under deregulation. However, bank credit granting process is traditionally determined almost exclusively on the basis of the borrower's ability to put up collateral in Taiwan. To improve these problems, an integrated and objective bank credit granting system is needed. It might be valuable to make the bank much more vitally important to the economic development. This paper provides a cognitive framework regarding the setting up of a credit granting DSS for banks in Taiwan from an integrated and practical point of view. Thus the development of a modified DSS architecture to manage bank credit granting effectively is main contribution in this paper. To propose an adaptive approach abandons the previous practice of depending almost purely upon collateral and suggest some necessary modified steps. And, the proposed system will significantly strengthen the competitive position of domestic banks against their foreign counterparts. This article employs cognitive concept and multi-stage decision model to develop a bank credit granting DSS for Taiwan. The proposed system is designed specifically to meet the problems currently confronting Taiwan, and is also used easily by personal computer. Hopefully, it will benefit us to redesign the credit granting model through an objective DSS. Furthermore, this paper describes an example of credit granting decision to verify the functions of the current system.

Measuring fair capital adequacy holdings for banks: The case of Taiwan

An option-theoretical framework was employed to solve the level of capital at which Taiwan's deposit insurer would just break even in guaranteeing the deposits of individual banks. The method is applied to ten banks in Taiwan yearly from 1985 to 1992. Asset value and volatility parameters were estimated using the maximum likelihood method via market-based equity data. These critical values were then applied as inputs in Merton's (7) deposit insurance pricing model towards yielding the fair levels of capital adequacy for each individual bank. The estimates showed that, except for in 1989, most of the sample banks were inadequately capitalized. Additionally, estimates of adequate levels of capital for the four commercial banks were found to generally exceed 10 billion NT (US$ 400 million). This finding indicates that the 10 billion NT initial capital requirement now imposed on new commercial banks, though generally perceived as high by the public, may actually not be adequate.

Monetary policy as a decision-making hierarchy: The case of Taiwan

We apply a threshold autoregressive model to a reaction function of the central bank of Taiwan to see if it responds differently to its policy objectives when the severity of inflation differs. We locate three thresholds and thus four inflation regimes. In the regime with essentially no inflation, the central bank responds to both output and inflation. In the low inflation regime, it responds countercyclically to output, but shows no response to inflation. In the moderate and high inflation regimes, it increasingly responds to inflation, but not to output. Our results of an asymmetric policy response are consistent with the central bank's public statements.

A dynamic box model of bioactive elements in the southern Taiwan Strait

A dynamic box model was applied to study the characteristics of biogeochemical cycling of PO4−P, NO3−N, AOU, POC and PON in the southern Taiwan Strait region based on the field data of the “Minnan Taiwan Bank Fishing Ground Upwelling Ecosystem Study” during the period of Dec. 1987–Nov. 1988. According to the unique hydrological and topographical features of the region, six boxes and three layers were considered in the model. The variation rates and fluxes of elements induced by horizontal current, upwelling, by diffusion, sinking of particles and biogeochemical processes were estimated respectively. Results further confirmed that upwellings had important effects in this region. The nearshore upwelling areas had net input fluxes of nutrients brought by upwelling water, also had high depletion rates of nutrients and production rates of particulate organic matter and dissolved oxygen. The abnormal net production of nutrients in the middle layer, (10–30 m) indicated the important role of bacteria in this high production region. The phytoplankton POC contributed about 28% of the total POC. POC settling out from the euphotic zone was estimated to be 2×10−6 g/(m2·s) which was about 35% of the primary production.

Capital Exporting Activities of the Taiwan Bank to China

Capital Exporting Activities of the Taiwan Bank to China

Unleashing a Tiger: Financial Deregulation in Taiwan

ARTICLES UNLEASHING A TIGER: FINANCIAL DEREGULATION IN TAIWAN Michael S. Bennettt I. INTRODUCTION For a nation of only twenty million people, the accumulation of wealth in the Republic of China ( Taiwan ) is remarkable. At roughly US$90 billion and rising, its foreign exchange reserves are the largest in the world.' Deposits in the official banking system at the beginning of 1992 exceeded US$300 billion. 2 Almost another US$300 billion of liquid savings is believed to exist outside of the official banking system, with a significant amount of such nonbank savings consisting of private gold holdings. 3 Even excluding depos- its outside the official banking system, the roughly US$15,000 of official deposits per person in Taiwan is almost half of the amount of per capita deposits in Japan, whose per capita GNP is three times greater than that of Taiwan. As the statistics recited above suggest, Taiwan has very suc- cessfully engaged in the mercantilist enterprise of hoarding capital. The island is bursting with liquidity as a result. However, Taiwan's financial system has not yet proven capable of unleashing the is- t Associate, O'Melveny & Myers (New York); J.D., Columbia University School of Law. I gratefully acknowledge the invaluable assistance of Harold B. Dichtes, J.D. expected 1994, Harvard Law School. 1. Sitting on Its Billions, ECONOMIST, Mar. 14, 1992, at 97. For an interesting discussion of Taiwan's foreign exchange reserves see Nigel Holloway, Taiwan Too Re- served, FAR E. ECON. REV., Jan. 31, 1991, at 48. 2. Sitting on Its Billions, supra note 1, at 97. 3. See, e.g., Jane K. Winn, Banking and Finance in Taiwan: The Prospects for Internationalization in the 1990s, 25 INT'L LAW. 907 (1991); A Dangerous Game in Taipei, ECONOMIST, Sept. 9, 1989, at 97. Unofficial depository institutions in Taiwan include underground investment houses, neighborhood loan circles, rotating credit clubs, and companies that take deposits from their employees. 4. Sitting on Its Billions, supra note 1, at 97. Taiwan's per capita GNP is approxi- mately US$8000.

Studies on the eggs and larvae, ofSardinella aurita (Cuv. & Val.) in the fishing grounds of Southern Fujian and the Taiwan Bank

In this paper, the morphological characters of eggs and larvae ofSardinella aurita (Cuvier & Valenciennes), its spawning ground, spawning seasons and spawning conditions have been studied.

On the Analysis of Competition Within Two-Species Mixtures of Plants

Based on the investigation data of 133 samples from 30 grid stations in the Fujian-Guangdong coastal upwelling region (21.6 degrees - 24.3 degrees N,115.7 degrees -118.7 degrees E) in 11-16 June 2009, this paper studied the phytoplankton species composition and cell abundance in the region in three dimensions (vertical, horizontal, and sectional), and approached their relations with major environmental factors. A total of 159 taxa belonging to 85 genera of 4 phyla were identified, among which, diatom was predominant, followed by dinoflagellate. Cyanophyceae mainly composed of Trichodesmium also occupied a greater proportion, but Chrysophyceae was only checked out in the upper 10 m water layer at coastal stations. The dominant species were Rhizosolenia alata f. gracillma, Thalassionema nitzschioides, Pseudonitzschia pungens, Skeletonema costatum, Thalassionema frauenfeldii, Paralia sulcata, Guinadia striata, Trichodesmium thiebautii, Ceratium fusus, and Gyrodinium spirale. Most of the phytoplankton taxa were cosmopolitan species, followed by warm-water species, while tropic high-salinity or oceanic eurythermal species were lesser. The cell abundance of the phytoplankton was average of 67.59 x10(2) ind x L(-1). In vertical profile, the cell abundance of the phytoplankton was the highest in surface water, and decreased with water depth. In horizontal and sectional profiles, the cell abundance had no definite patterns, but the high abundance region was in Nanao Island water area, being anastomosed with the center of upwelling region, which indicated that the weak and small intensity of deep-sea water upwelling caused lesser phytoplankton cell abundance and superposition. The comparatively high phytoplankton cell abundance in the four sections (B, C, D, E) along Nanao-Zhangpu was resulted from the upwelling from Taiwan Bank. The phytoplankton cell abundance had a significant positive correlation with the PO4(3-) concentration in the upper 10 m water layer, but no correlation with the dissolved inorganic nitrogen (DIN) concentration. Thereby, to study the eco-physiological responses of phytoplankton species to nutrient stress would be helpful to reveal the formation mechanism of algal bloom in upwelling region.