The Relationship between Competition and Risk-taking Behavior for the Banking Industry in Taiwan

• Main Authors: Jiun-Shou Tsai, 蔡俊收
• Other Authors: Roung-Jen Wu
• Format: Others
• Language: zh-TW
• Published: 2006
• Online Access: http://ndltd.ncl.edu.tw/handle/84580650707576512764

碩士 === 國立雲林科技大學 === 財務金融系碩士班 === 94 === The main purpose of this thesis is to study the relationship between competition and bank risk-taking for the banking industry in Taiwan under considering that banking competition is represented by bank charter value. The bank charter value is measured by Tobin''s q. Non-performing loan ratio, market value capital-to-asset ratio, and earnings volatility are used to measure bank risk. The two-stage (two equations) analysis is employed to analyze this relationship. The yearly data covers 1992-2005. The empirical results are found as follows: 1.During 1992-2005, the charter value for the aggregate banks is significantly negatively related to non-performing loan ratio, positively to market value capital-to-asset ratio, and negatively to earnings volatility. 2.During 1992-2000, the charter value for the aggregate banks is not significantly related to non-performing loan ratio. but it is significantly positively related to market value capital-to-asset ratio and negatively to earnings volatility. During 2001-2005, the charter value for the aggregate banks is significantly negatively related to non-performing loan ratio and positively to market value capital-to-asset ratio. But it is not significantly related to earnings volatility. 3.During 1992-2005, the charter value for new banks is significantly negatively related to non-performing loan ratio. But that for old banks is not significantly related to non-performing loan ratio. The charter value for both new banks and old banks are significantly positively related to market value capital-to-asset ratio. The charter value for new banks is not significantly related to earnings volatility. But that for old banks is significantly negatively related to earnings volatility.