094SCC00121007An Empirical Study on the Difference in Operating Efficiency and Profitability between Security Firms under Financial Holding Companies and Non-Financial Holding Security Firms

• Main Authors: Kuo Tien Yi, 郭添義
• Other Authors: 方國榮
• Format: Others
• Language: zh-TW
• Published: 2006
• Online Access: http://ndltd.ncl.edu.tw/handle/38571418408309181792

碩士 === 實踐大學 === 企業管理研究所 === 94 === The landscape of the Taiwanese securities market has changed dramatically due to market liberations and opening, expansion, mergers and acquisitions since 1988, as well as consolidations of financial holding companies. The differences in operating performance widen due to fierce market competition. A large number of securities firms went out of business or acquired by large ones. According to relevant research, to be included into a financial holding company generates synergy. However, this type o research goes not look into the interactions between different financial performance dimensions. This research aims to adopt financial statement analysis and multivariate statistical analysis to examine the financial performance of securities firms, highlight the key actors that affect profitability and explore the differentiators in performance indicators due to different attributes of financial holding companies. The main purposes of the research are as follows: 1.Based on the principles of compiling financial statements stipulated in securities regulations and literature review, this research paper gathers 18 financial ratios to compose five major dimensions for financial performance according to the results of factor analysis. These five dimensions are profitability, capital structure, debt-paying ability, asset management performance abilities and cash flows. The five financial dimensions very well explained 86.07% of variances o the 18 financial ratios. This is a strong indicator that these 18 financial rations can be used to analyze financial performance of the securities firms. 2.The empirical finding of a path analysis in the study over the relationship of financial performance indicators of the securities firms find that the factors that affect the profitability are scale, capital structure, debt paying abilities asset management effectiveness. There are three path relationships as follows: a.Path coefficient of scale is 0.43654, the greatest in terms of direct impacts to profitability. b.Path coefficient of scale to profitability through capital structure and debt paying abilities is -0.09916, the second greatest in terms of direct impacts to profitability. c.Path coefficient of asset management effectiveness through debt paying abilities to profitability is -0.09217, in terms of indirect impacts to profitability. 3.The study over the performance relationships for the securities firms finds that the two key factors that affect their profitability are scale and debt paying abilities. Scale is mainly defined as market shares and capital sizes. At the present time, brokerage fees are the main source of income for the domestic securities firms so the market share determines the operating income. Access to capital and capital turnover management indirectly affect their debt paying abilities and thus profitability. 4.This research finds that in terms of profitability, capital structure and debt paying abilities, the securities firms under financial holding companies are significantly superior to those not under financial holding companies. Based on the relationship analysis of financial performance of the securities firms and the differences in performance between those under and not under financial holding companies, this research finds that the key factors to profitability is scale, i.e. how the management teams enhance the channels under the financial holding companies to increase market shares and incomes in the brokerage market, in order to generate synergy for the financial holding companies. 5.The empirical study over the difference in performance attributes of financial holding companies finds that the capital structure performance indicators of the securities firms under the financial holding companies whose main bodies are banks and securities firms are superior to those under the financial companies whose main bodies are bills financing and insurance companies.