Effects of Creditor Governance, Board Characteristics and Ownership Structure on Bank Performance and Risk Taking
Date Issued
2015
Date
2015
Author(s)
Jhou, Jhe-Ling
Abstract
Starting from the industry-specific features of bank governance, this paper focuses on the role of stakeholders, especially creditors of banks and the emphasis on the risk management. Not only do we investigate effects of board independence, institutional ownership and board expertise on bank performance and risk taking, we also define related lending as a variable of creditor governance and analyze its influence. Using the dataset of 24 banks from Taiwan during 2006-2013, the evidence shows that a higher related lending would reduce the bank performance and increase both non-performing loan and insolvency risk. In addition, board independence has no effect on performance, while banks with higher ratio of institutional ownership and board expertise can perform better. The empirical results also show that board independence, institutional ownership and board expertise can reduce bank risk taking effectively.
Subjects
bank governance
creditor governance
related lending
bank performance
risk taking
Type
thesis