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Corporate Governance, Financial Innovation and Performance: Evidence from Taiwan’s Banking Industry

Author

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  • Lie-Huey Wang

    (Department of Finance, Ming Chuan University, Zhong-Shan North Road, Section 5, Taipei 111, Taiwan)

  • Xin-Yuan Cao

    (Department of Finance, Ming Chuan University, Zhong-Shan North Road, Section 5, Taipei 111, Taiwan)

Abstract

This study explores the effect of corporate governance on financial innovation and the effect of financial innovation on performance in Taiwan’s banking industry from 2011 to 2019. The results find that the banks have higher shareholding of institutional investors, ratio of independent directors, attendance rate of directors, average education level of directors and more directors with a financial or accounting background, the greater innovative financial services offered by banks. After 2015, the impact of corporate governance on banks’ innovative financial services has increased. Moreover, the greater financial innovation services, the higher the bank profitability and value, especially after 2015. Finally, offering more innovative financial services can enhance the value of financial-holding subsidiary banks; by contrast, doing the same might negatively affect the profitability of nonfinancial-holding banks.

Suggested Citation

  • Lie-Huey Wang & Xin-Yuan Cao, 2022. "Corporate Governance, Financial Innovation and Performance: Evidence from Taiwan’s Banking Industry," IJFS, MDPI, vol. 10(2), pages 1-17, May.
    • Handle: RePEc:gam:jijfss:v:10:y:2022:i:2:p:32-:d:812551
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    References listed on IDEAS

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    Cited by:

    1. Jabbar Sehen Issa & Mohammad Reza Abbaszadeh & Mahdi Salehi, 2022. "The Impact of Islamic Banking Corporate Governance on Green Banking," Administrative Sciences, MDPI, vol. 12(4), pages 1-20, December.

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