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Does family engagement influence loan diversification and tax behavior in banks? Evidence from the Taiwanese market

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  • Tsay, Min-Hung
  • Chang, Li-Han
  • Chang, Hsuan-Ling
  • Hsu, Tzu-Hao

Abstract

This study examines whether family engagement in banks leads to different operational practices, with a focus on loan portfolio diversification and tax aggressiveness. Using data from Taiwanese banks, we manually assess the family member data by identifying the number of key related parties disclosed, and apply the approach of Parise (2024) to identify potential family links within banks. Our findings show that family-run banks exhibit significantly greater loan diversification and have more conservative tax strategies compared to non-family banks. These results suggest that family engagement fosters long-term stability rather than short-term profit maximization in the banking industry.

Suggested Citation

  • Tsay, Min-Hung & Chang, Li-Han & Chang, Hsuan-Ling & Hsu, Tzu-Hao, 2026. "Does family engagement influence loan diversification and tax behavior in banks? Evidence from the Taiwanese market," Pacific-Basin Finance Journal, Elsevier, vol. 98(C).
    • Handle: RePEc:eee:pacfin:v:98:y:2026:i:c:s0927538x26001216
    DOI: 10.1016/j.pacfin.2026.103175
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    Keywords

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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