Profit Performance of Financial Holding Companies: Evidence from Taiwan

Wan-Chun Liu and Chen-Min Hsu

Emerging Markets Finance and Trade, 2014, vol. 50, issue 03, 190-200

Abstract: The paper aims to examine the determinants of profit performance of financial holding companies (FHCs) using panel data for the period 2001-9. The effects of bank-specific ownership structure and dual-core strategy are examined. Our findings show that (1) business diversification, a lower financial cost, a higher liquidity ratio, larger assets, and lower debt ratios can improve the profit performance of FHCs; (2) the percentage of director or government ownership does not affect FHCs' profitability, whereas foreign ownership has a significantly negative impact on FHC profitability; and (3) a dual-core strategy including banking and insurance has higher profit performance than the other strategies.

Keywords: financial holding companies; ownership structure; random effect; synergy (search for similar items in EconPapers)
Date: 2014
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