| dc.description.abstract | This study utilizes data from 13 Taiwanese banks, collected from the first quarter of 2016 to the fourth quarter of 2023 by the Taiwan Economy Journal, to examine the relationship between bank capital structure, operational decisions, equity, corporate governance indicators, and bankruptcy risk. The Z-Score, loan-to-asset ratio, and non-performing loan ratio are employed as dependent variables to measure bank risk.
For the independent variables, capital structure is represented by capital scale, capital adequacy ratio, Tier 1 capital ratio, and loan loss reserve coverage ratio. Operational decisions are measured by the loan-to-deposit ratio, SME loan ratio, and the proportion of interest income. Equity and corporate governance are represented by a dummy variable for government ownership, management turnover, and board gender diversity index.
An OLS regression model is used to estimate the impact of these variables on bank risk. Additionally, interaction terms between the independent variables and a COVID dummy variable are included to analyze the effects during the pandemic.
Empirical results indicate that the capital structure emphasized by the Basel III Accord significantly impacts bank risk during the pandemic. Improving capital structure can reduce bankruptcy risk, and, with stringent auditing mechanisms, increased lending does not necessarily elevate bank risk. Government-owned banks exhibit lower bankruptcy risk compared to other banks. However, the increasingly emphasized board gender diversity in international discourse does not show a significant effect in the Taiwanese banking sector. | en_US |