Banks In Taiwan Research Articles

Does Directors and Officers’ Liability Insurance Induce Bank Risk‐taking? Evidence from Taiwan

AbstractThis study investigates the effect of directors and officers’ (D&O) insurance on bank risk‐taking. Using data from Taiwan banks, we find that: (i) the level of D&O insurance coverage is positively associated with risk‐taking; and (ii) this positive relationship is less pronounced for banks whose insurers are highly credit‐rated or specialists in the D&O insurance market. Overall, considering the severe consequences of greater bank risk‐taking, our findings highlight the need for regulators to monitor the use of D&O insurance policies by banks.

Characteristics of picoplankton abundances during a Thalassiosira diporocyclus bloom in the Taiwan Bank in late winter

To understand the variations of picoplankton (Prochlorococcus, Synechococcus, picoeukaryotes, and heterotrophic bacteria) abundances during diatom bloom, the distribution of picoplankton in the Taiwan Bank, South China Sea was investigated using flow cytometry during a Thalassiosira diporocyclus bloom in March 2016. The results indicated an abrupt abundance decrease for Prochlorococcus, Synechococcus, and picoeukaryotes within the bloom area while the abundance of heterotrophic bacteria showed no significant difference between the bloom and non-bloom areas. We found two sub-groups of heterotrophic bacteria: high- and low-nucleic acid content (HNA and LNA) bacteria with HNA dominated in the bloom area whereas LNA dominated in the non-bloom area. Among the picoplankton components, HNA represented the highest (61.1%) carbon biomass in the bloom area while picoeukaryotes represented the highest (37.6%) in the non-bloom area. Our findings implied that heterotrophic bacteria, especially HNA, played an essential role during the diatom bloom.

Credit Ratings and Bank Affiliation to Financial Holding Companies: Effects of Government Ownership and Financial Crisis

ABSTRACTThis study compares credit ratings between FHC affiliated banks and independent banks using Taiwan bank and FHC data. The results show banks that join Insurance- or Security-FHCs obtain better ratings than those that join Bank-FHCs. Second, banks that join FHCs with higher activity diversification can obtain better credit ratings. Third, joining government-owned FHCs enhances bank credit ratings and mitigates bank default risk compared to joining non-government-owned FHCs. Fourth, prior to the financial crisis, banks joining FHCs can obtain better credit ratings and reduce the cost of debt. However, during the financial crisis, rating agencies stopped regarding banks joining privately owned bank-based FHCs as risk diversification and assigning better credit ratings on this basis.

Money, Images, and the State: The Taiwanization of the Republic of China, 1945–2000

Images on money provide a widely circulated medium through which a state can make its values visible: the money circulated in postwar Taiwan displayed almost no Great ideology, even in the Chiang Kai-shek era (1946–1975). Chiang ordered the Bank of Taiwan to issue the Taiwan dollar in 1946 and the New Taiwan dollar in 1949, rather than having a Taiwan branch office of the Central Bank of China circulate the legal tender of the Republic of China (ROC). From 1961 on, a picture of the ROC presidential office building in Taipei appeared on notes. Images on money and related currency laws up to 2000 reveal the ROC's Taiwanization. At first, this process was heavily driven by the Japanese legacy and American influence; later, it was shaped more by Taiwan's democratization. Imperial China's culture was reinstated, and pre-1949 ROC symbols were reproduced; the unification of images on the ROC's Taiwan money diverges from the diversification of images on money in imperial China and the pre-1949 ROC.

Effect of Fintech on the Productivity in the Taiwan Banking Industry

Effect of Fintech on the Productivity in the Taiwan Banking Industry

FinTech in Taiwan: a case study of a Bank’s strategic planning for an investment in a FinTech company

Abstract Introduction Since 2015 is the year of FinTech in Taiwan, it is worth investigating the challenges that emerged when banks were encouraged to invest in FinTech companies for collaboration. This study aims to identify the strategic considerations in the process of searching for FinTech investment targets. Case description This study used a case study investigation of a top-5 bank in Taiwan. The major data sources include the meeting notes of the FinTech investment task force and interviews with the team members. Co-opetition theory was adopted as the theoretical framework and interview questions were derived from the PARTS strategies in co-petition theory. The results relate to: (1) the strategic goals of FinTech investment, (2) the added value from FinTech companies, (3) criteria in selecting candidates in the same FinTech area, (4) choosing to work as either a cooperator or a competitor, and (5) barriers from policies and regulations. Discussion and evaluation This study has several findings: (1) regulations and policies shape FinTech’s development; (2) banks, technology companies, and customers are not “FinTech ready;” (3) Compare top-down with bottom up strategies; (4) banks and FinTech companies have complex relationships; (5) it is unlikely that Taiwan will produce FinTech disruptors in the near future. Conclusion The findings and discussion can benefit researchers and administrators in finance-related industries. More studies are desired to observe long-term development in terms of how companies collaborate or compete in specific FinTech areas.

Evaluating Taiwanese Bank Efficiency Using the Two-Stage Range DEA Model

This paper develops a range directional distance data envelopment analysis (DEA) model to simultaneously deal with the problems of negative data and undesirable outputs in the study of performance measurement with two-stage DEA. We report on the development of this model to handle both positive and negative data in a DEA framework and accommodate the problem of undesirable intermediate outputs in the first stage of operational processes. Unlike previous two-stage DEA models we allow for a nonuniform abatement factor imposing on stage 1’ production technology. Such a model is then applied to evaluate Taiwanese bank efficiencies both at the operational stage and profitability stage in banking activities based on a data set consisting of 35 domestic banks in Taiwan in the period 2007. The results indicate that, by the range directional two-stage data envelopment analysis model, the operational efficiency was smaller than the profitability efficiency. Many banks generated too many performing loans in which independent banks should reduce more performing loans than financial holding company subsidiary banks. Both the ratio of investments to loans and the ratio of nonperforming loans to performing loans did not have significant contributions to the efficiency. This paper is able to provide information for bank operators and researchers on the managerial and strategic implications of how negative data and undesirable outputs affect efficiency and how to measure efficiency appropriately.

Status quo of management of the human tissue banks in Taiwan.

As the technologies associated with transplantation and biological tissue engineering continue to advance, human cells and tissues form an integral part to the practice of regenerative medicine. The patient's use of tissues entails the risk of introducing, transmitting and spreading communicable diseases. To prevent such risk and to ensure that the human organs, tissues and cells remain intact and functional after being handled and processed, the transplanted tissues must be subject to good management standards through all stages of collection, screening, processing, storage and distribution as the safety of the users is of the utmost importance. On February 2009, the government of Taiwan promulgated the Regulations for Administration on Human Organ Bank that requires all human tissues banks to adhere to the Good Tissue Practice for Human Organ, Tissue and Cell in terms of establishment and operation in order to cope with the international management trend and the development and management need of the domestic industry. Six years have passed since the law became effective. This article seeks to introduce the current management mechanism and status quo of management of human tissue banks in Taiwan. We also conducted statistical analysis of the data relating to the tissue banks to identify potential risks and the room for improvement. The study concludes that human tissue banks in Taiwan are on the right track with their management practice, leading to a state of steady development and progress.

Research on the competitive dynamics and structured context analysis

PurposeThe credit card business has been one of the key businesses for banks in Taiwan. The purpose of this paper is to use competitive dynamics and structured context analysis (SCA) to explore the competition relationships among market, resources, and strategies concerning the credit card issued banks in Taiwan.Design/methodology/approachThe market commonality and resource similarity analysis of competitive dynamics in the first stage obtained the competitive mapping of four major credit card issue banks, as well as the differences of competition strategy. In the second stage, 1,968 pieces of data on credit card news from 2013 to 2014 were collected. SCA was used to analyze the competitive action, competitive response, number of responses, response lag, and response order.FindingsThe competitor mapping and four hypothesis obtained from competitive dynamics correspond to the credit card competition strategy, as obtained from SCA.Originality/valueThis research combined competitive dynamics and SCA to analyze the credit cards market in Taiwan. The research model could be used in the other financial market.

Networking behavior: from goal orientation to promotability

Purpose– Networking behaviors assist individuals in doing their jobs better and advancing their careers. However, most research emphasizes the effects of job characteristics on networking behaviors, neglecting the effects of individual differences in goal orientations. Moreover, few studies investigate the prospective evaluation of promotability and the mediating effect of networking behavior on the relationship between goal orientation and promotability. Thus, the purpose of this paper is to clarify the nomological network and to expand the domain of networking behavior by identifying networking as career- and community-based networking behaviors and by examining the differential relationships among goal orientation, networking behaviors, and promotability.Design/methodology/approach– This study surveyed and collected data from 160 financial employees and 103 supervisors working at branches of a large bank in Taiwan. Questionnaires addressing both networking behavior and goal orientation were distributed to employees, and one week later their supervisors were sent another survey about employees’ promotability evaluations.Findings– Learning goal orientation was positively related to both career- and community-based networking behaviors. Performance goal orientation was also positively related to career-based networking behaviors, but negatively related to community-based networking behaviors. Career-based networking behaviors, particularly maintaining contacts and engaging in professional activities, were found to be positively related to promotability. Results also show that career-based networking behaviors, particularly maintaining contacts and engaging in professional activities, mediated the relationship between goal orientation and promotability.Research limitations/implications– This study addresses the importance of distinguishing between networking behaviors as career based and networking behaviors as community based and shows that these two sets of networking behaviors arise from different goal orientations and have differential effects on supervisory evaluation of promotability.Practical implications– By linking networking behavior with promotability, this study helps managers understand how employees’ enactment of specific networking behaviors can facilitate both the employees’ career development and the employees’ placement in important organizational positions.Originality/value– This study fulfills an identified need to understand the nomological network of networking behavior.

The liquidity impact on firm values: The evidence of Taiwan's banking industry

Abstract Liquidity plays an important role in financial markets, especially during a financial crisis. New Basel III regulatory framework highlights the importance of liquidity risk management implemented by financial institutions. Moreover, updated International Financial Reporting Standards (IFRS) require the improvements about fair value measurements and reinforce existing principles for disclosures about the liquidity risk associated with financial instruments. Using the liquidity discount model of Chen (2012), we are able to empirically classify Taiwan's financial institutions into three liquidity categories: safe, crisis contagious and vulnerable. Our findings can serve as an early warning signal for liquidity calamity. In addition, we investigate what factors affect firm-specific liquidity discounts for these institutions and conduct a sub-period analysis, which examines whether there is significant liquidity discounts changes before and after the 2008 financial crisis. We find that liquidity discounts change substantially during the financial crisis. Furthermore, we find that liquidity discounts can be attributed to some firm-specific performance.

The multiple roles of cord blood banks in Taiwan: competition and collaboration

In Taiwan, as in many countries where national cord blood donation programs are not available, cord blood donation and banking services are provided by non-governmental sectors. This article discusses: (1) the various cord blood banking models to critically examine the public and private binary; and (2) the collaboration and networking between cord blood banks and other institutions as strategies in response to strict governance and fierce competition. This article, based on fieldwork in Taiwan, gives an overview of cord blood banking models in Taiwan and shows the interdependent relationship among different stakeholders in the generation of stem cell knowledge. The concept of “bionetworking” is drawn upon to analyze the networks that cord blood banks establish with various stakeholders. I argue that, through analyzing networks and activities that cord blood banks engaged in and their relation with science, our understandings of stem cell knowledge and therapies production can be deepened.

Non-radial cost Luenberger productivity indicator

This study decomposes cost inefficiency into technical and allocative components in a more general way based on the directional Russell measure (DRM) of Fukuyama and Weber (2009), with the allocative component being completely clear of technical inefficiency. Based on this decomposition, we develop a cost-oriented productivity indicator, the cost Luenberger productivity indicator (CL), which completely embraces the concept of cost minimization and provides four sources of productivity change: technical efficiency change, the change in allocative efficiency, the shift of technology, and the effect of input price change. To illustrate the above decompositions of cost inefficiency and productivity change and to investigate whether the establishment of a financial holding company (FHC) offers a bank greater operating efficiency and an improvement in productivity change, this study employs data on Taiwan's banking industry covering the period 2006–2012.

Measurement of Banking Performance in a Dynamic Multiactivity Network Structure: Evidence from Banks in Taiwan

ABSTRACTIn this study, we develop a dynamic multi-activity network DEA (DMNDEA) model that combines the multi-activity network DEA model (MNDEA) with the dynamic network DEA model (DNDEA). This new model is used to measure the efficiency of twenty-seven Taiwanese banks under a multistage and multiactivity production process during the sample period of 2006–12. The proposed model is able to identify whether inefficiencies stem from financial activities or the production stages and provides managers with information to propose better strategies to improve the overall performance of their banks under fluid macroeconomic conditions across time.

Study of optimal capital adequacy ratios

In response to international financial developments after the global financial tsunami in 2008, the Bank for International Settlements (BIS) proposed Basel III in 2010, whereby banks have to increase their minimum capital adequacy ratios year by year with a goal of 10.5 % by 2019. This study looks to answer two questions: (1) Is the capital adequacy ratio of 8 % required by Basel II too low to guide banks moving toward the efficiency frontier? (2) Is Basel III’s target capital adequacy ratio of 10.5 % in 2019 so strict that it might impact banks’ efficiency? The dataset herein consists of thirty-one Taiwan commercial banks over the period 2007–2009 for a total of ninety-three observations. The empirical results indicate that as many as 93.5 % of the banks have an optimal capital adequacy ratio greater than the 8 % regulation in Basel II. Approximately 88.2 % of the banks have an optimal capital adequacy ratio higher than 10.5 %. In addition, nearly 73 % of the banks should raise their BIS ratios in order to achieve the optimal BIS ratios. Hence, higher BIS ratios required by Basel III may pilot the Taiwan banking industry to reach the efficiency frontier.

How to Build up the Loan - Evaluation System toward Small and Medium Enterprises between Taiwan and China’s Commercial Banks？ The Application for Multi Criteria Decision Making

<p>Because of the financial market fast development between Taiwan and Mainland China, commercial banks, sometimes, cannot have an efficient method to investigate loan credentials for small and medium enterprises. Without efficient methods, commercial banks are forced to undertake the unnecessary default risks. The article chooses the behaviors of commercial banks between Mainland China and Taiwan to become study target. The purpose is to investigate the assessment method and influence factor of commercial banks toward small and medium enterprises for loan. Through modified Delphi approach and Fuzzy Analytic Hierarchy Process (FAHP) in multi-criteria decision-making (MCDM), the article attempts to analyze the decision-making measure of loan for commercial banks toward small and medium enterprises. From the results of practical evidence, the loan assessment measure of commercial banks between Taiwan and Mainland China is quite different. During loan assessment, China commercial banks focus on the debt-paying ability; on the contrary, Taiwan commercial banks focus on profitability of enterprises. The practical approved result of the study has supplied the insufficient data for related study articles in the past. More, the study can also be an important reference for perform related tasks in Taiwan’s and China’s commercial banks.</p>

Constructing a 1-km Gridded Multi-Scalar Drought Index Dataset (1960 - 2012) in Taiwan Based on the Standardized Precipitation Evapotranspiration Index-SPEI

An index sensitive to global warming, the standardized precipitation evapotranspiration index (SPEI), is employed in this study to construct a 1-km gridded multi-scalar drought index data bank in Taiwan. A site- and scale-dependent posterior fitness assessment procedure regarding determination of the most appropriate statistical distribution is used to standardize the station's water deficit/surplus series, thereby SPEI at various time scales. Model uncertainty at different scales is evaluated and the results show that the uncertainty is higher for the shorter 10-day scale. Contrasts in the climatic means between SPEI and popular standardized precipitation index (SPI) are compared. The climatic pre-summer monsoon heating and midsummer drought phenomena are better captured by the SPEI. The established data bank, one of the data integration tasks in the Taiwan Climate Change Projection and Information Platform (TCCIP) project, is helpful in historical drought diagnostics. It also serves as the ground truth to correct model biases while using the regional model to project hydro-climate change and impact assessment, and historical baseline in the statistical downscaling while developing the statistical relationship between the general circulation model outputs and fine-scale observations. As an example of applications, the gridded SPEI at 3-month time scale is used to study the interannual variability in springtime drought. The results show that Taiwan's southwestern plains region is most vulnerable to the risk of droughts. Composite analysis reveals that possible causes of island-wide drought link to the turnabout of cold El Nino-Southern Oscillation (ENSO) phase but also to the interannual variability in Pacific Decadal Oscillation when the analysis is initiated from the regional perspective.

Learning climate and customer-oriented behaviors: the mediation of customer knowledge

Purpose– The purpose of this paper is to evaluate the effect of learning climate on customer-oriented behaviors by incorporating salespeople’s customer knowledge in the banks. It also explores the mediating role of customer knowledge between learning climate and customer-oriented behaviors.Design/methodology/approach– A conceptual two-level model that links learning climate to customer-oriented behaviors was developed and tested using data collected from salespeople and customers in banks in Taiwan. Data from 444 customers involving 92 salespeople was collected via a questionnaire and analyzed using hierarchical linear modeling.Findings– The results show that learning climate encourages salespeople to develop customer knowledge and customer-oriented behaviors, and that salespeople’s customer knowledge positively influences customer-oriented behaviors. This study also provides empirical support for the hypotheses that learning climate helps salespeople increase customer-oriented behaviors through improving salespeople’s customer knowledge.Research limitations/implications– The findings highlight the importance of enhancing learning climate and customer knowledge to enable banks to improve salespeople’s customer-oriented behaviors. This research also points to customer knowledge as mediating mechanisms that can explain the association between learning climate and customer-oriented behaviors in the sales context.Originality/value– By integrating knowledge management with organizational learning research, this study evaluates the effect of learning climate on salespeople’s customer-oriented behaviors by incorporating their customer knowledge. In addition, the present study points to salespeople’s customer knowledge as one of several mediating mechanisms that explains the association between learning climate and customer-oriented behaviors.

Phytoplankton community and environmental correlates in a coastal upwelling zone along western Taiwan Strait

Upwelling system in western Taiwan Strait is important for facilitating the fishery production. This study investigated hydro-chemical properties, phytoplankton biomass, phytoplankton species composition, three-dimensional (horizontal, vertical and transect) distribution of phytoplankton abundance, as well as phytoplankton annual variation and the correlation of phytoplankton community with the upwelling of underlying current and nutrients according to samples of Fujian-Guangdong coastal upwelling zone in western Taiwan Strait from August 27 to September 8, 2009. The results manifest that the nutrient-rich cold and high salinity current on the continental shelf of South China Sea upwells to the Fujian-Guangdong coastal waters through Taiwan Bank and the surging strength to surface is weak while strong at 30-m layer. The thermohaline center of coastal upwelling shifts to the east of Dongshan Island and expanded to offshore waters in comparison with previous records. A total of 137 phytoplankton species belonging to 59 genera in 4 phyla are identified excluding the unidentified species. Diatom is the first major group and followed by dinoflagellate. Cyanobacteria mainly composed by three Trichodesmium species account for a certain proportions, while Chrysophyta are only found in offshore waters. The dominant species include Thalassionema nitzschioides, Pseudo-nitzschia pungens, Thalassionema frauenfeldii, Pseudo-nitzschia delicatissima, Rhizosolenia styliformis, Chaetoceros curvisetus, Diplopsalis lenticula and Trichodesmium thiebautii. Phytoplankton community mainly consists of eurythermal and eurytopic species, followed by warm-water species, tropic high-salinity species and oceanic eurythermic species in order. Phytoplankton abundance ranges from 1.00×102 ind./L~437.22×102 ind./L with an average of 47.36×102 ind./L. For vertical distribution, maximum abundance is found at 30m-depth and the surface comes second. Besides, the abundance below 30m decreases with increasing water depth. The horizontal and transect distribution of phytoplankton abundance are both displayed in patchy size, and the peak area is the offshore waters from the east of Dongshan Island to the south of Zhangpu which is basically coincident with the thermohaline center of the upwelling, but the distribution range of phytoplankton high abundance is expanded out of the upwelling center. Phytoplankton abundances on 3 transects in offshore waters from the east of Dongshan Island to the south of Zhangpu are higher than that of nearshore waters and the other 5 transects. Moreover, the underlying current is accompanied by shade flora so as to offer a certain evidence for the presence of upwelling. Phytoplankton abundance at 30m-depth and bottom both present low significant positive correlation with phosphate, while there are not significant correlations between the content of inorganic nitrogen and phytoplankton abundance in all water layers. The intensity and range of Fujian-guangdong coastal upwelling has a regulating effect on the species succession, abundance distribution and the location of phytoplankton peak area.

Risk-based decompositions of the meta profit efficiency of Taiwanese and Chinese banks

This study measures the profit efficiencies of Taiwanese and Chinese banks with the assumption that both types could operate under the metafrontier. To consider the risk consideration of banks, we include equity capital as a quasi-fixed input and develop the risk-based measures of the meta Nerlovian profit efficiency. We further decompose meta profit efficiency and gap into technology and allocative efficiencies and gaps. We use 34 Taiwanese banks and 70 Chinese banks in 2011 to empirically measure profit efficiency and its decompositions. Empirical results show that the Chinese state-owned banks perform the best in meta profit efficiency, followed by Chinese joint-equity banks and Taiwanese state-owned banks. These three types of banks are performing better than the other types of banks in Taiwan and China. We also find that Taiwanese private banks perform better in profit and technical efficiencies versus Chinese city banks.