The Effects of Ownership Structure on Bank Efficiency for Taiwan: Is there a Non-Linear Relationship?

Abstract

Abstract To investigate the impact of ownership structure and concentration on bank efficiency in the case of Taiwan, we consider the non-linear relationship between ownership and efficiency, using the panel threshold model technique to test whether a non-linear relationship is significant. Empirical findings indicate that ownership structure is significantly impacted by bank efficiency; the results show that managerial ownership negatively relates to efficiency and ownership concentration, and state-ownership has no regard for bank efficiency. The results show that the threshold effect is significant, implying a significant non-linear relationship between board ownership and efficiency. This supports the form of non-linear relation as found in previous literature. JEL Classification: G21, G34. Keywords: Ownership structure, Concentration, Panel threshold model.