Managerial ties, control and deregulation: An investigation of business groups entering the deregulated banking industry in Taiwan

Chung, Hsi‐Mei

doi:10.1007/s10490-006-9018-z

Cited by 52 publications

(38 citation statements)

References 44 publications

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“…As expected, the more entrepreneur-friendly these formal institutional requirements are, the more entrepreneurship flourishes, and the more developed these economies will become -and vice versa (Le, Venkatesh, & Nguyen, 2006;. Another example is research on business groups and conglomerates (Chang, 2006;Chung, 2006;Dieleman & Sachs, 2006;Guillen, 2000;Khanna & Palepu, 2000;Li, Ramaswamy, & Petitt, 2006a;Lu & Yao, 2006;Ma et al, 2006;Peng & Delios, 2006;Ramaswamy et al, 2004;Yiu et al, 2005). 7 Another geographic region that has attracted significant research attention is Central and Eastern Europe.…”

Section: Notesmentioning

confidence: 98%

“…Among many answers, a partial answer suggests that interpersonal networks (called guanxi in Chinese) cultivated by managers in the society may serve as informal substitutes for formal institutional support (Peng & Heath, 1996). In other words, micro, interpersonal relationships among managers are translated into a macro, interorganizational strategy of relying on networks and alliances to grow the firm, thus leading to a micro-macro link (Peng & Luo, 2000; see also Chung, 2006;Li, 2005;Wu & Leung, 2005). Overall, this research has supported and extended a key institutional proposition: while it is the combination of formal and informal institutional frameworks that shapes strategic choices (North, 1990), in situations whereby formal institutions are weak, informal institutions, such as norms governing interpersonal relationships, rise to play a larger role in driving firm strategies and performance (Peng & Heath, 1996).…”

Section: Growing the Firm In Chinamentioning

confidence: 99%

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An institution-based view of international business strategy: a focus on emerging economies

2008

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Leveraging the recent research interest in emerging economies, this Perspective paper argues that an institution-based view of international business (IB) strategy has emerged. It is positioned as one leg that helps sustain the ''strategy tripod'' (the other two legs consisting of the industry-and resource-based views). We then review four diverse areas of substantive research: (1) antidumping as entry barriers; (2) competing in and out of India; (3) growing the firm in China; and (4) governing the corporation in emerging economies. Overall, we argue that an institution-based view of IB strategy, in combination with industry-and resource-based views, will not only help sustain a strategy tripod, but also shed significant light on the most fundamental questions confronting IB, such as ''What drives firm strategy and performance in IB?''

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Section: Notesmentioning

confidence: 98%

Section: Growing the Firm In Chinamentioning

confidence: 99%

An institution-based view of international business strategy: a focus on emerging economies

2008

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“…In Taiwan, even before the enactment of the FHC Act of 2001, family-owned financial groups such as China Trust Group, Cathay Group, Shin Kong Group, and Fubon Group had already established and engaged in various financial service markets. These financial groups are, in turn, part of a bigger familyowned conglomerate, whose diversification is partly based on institutional relatedness, such as exploiting social ties with the government and introducing internal capital market into an emerging economy (Chung, 2006;Peng & Delios, 2006;Peng & Luo, 2000).…”

Section: Financial Holding Companiesmentioning

confidence: 99%

“…Luo and Chung (2005) study how family and other particularistic ties between top leaders affect business group performance in Taiwan during institutional transition. Also, Chung (2006) reveals that the external ties with government facilitate business group entry into a newly deregulated industry, i.e., banking industry, in Taiwan. Our article extends the argument by explicitly showing how embedded ties with customers, yet another source of social capital, create economies of scope through cross-selling mechanisms for FHCs.…”

Section: Contributionsmentioning

confidence: 99%

Social capital and cross-selling within financial holding companies in an emerging economy

Chuang

Lin

2007

Asia Pacific J Manage

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Social capital is the goodwill available to individuals or groups from their network of relationships. It is widely believed that social capital is useful in facilitating and governing hazardous transactions. But how social capital, in the context of a financial holding company (FHC), actually facilitates cross-selling is unknown, especially in an emerging economy. This article maintains that effective cross-selling requires an FHC to first access and accumulate comprehensive and tacit customer-specific knowledge (the "where from" condition) and then share and leverage this knowledge to other applicable business opportunities (the "where to" condition). The role of social capital and embedded ties is found to be critical to this process. Finally, we argue that the major route for the effective cross-selling within an FHC is from the commercial banking division to the underwriting division. Hypotheses are tested on the transactional data collected from Taiwan, and empirical results provide broad support for our arguments.Keywords Social capital . Cross-selling . Financial holding companies . Emerging economiesIn many emerging economies in Asia, capital markets are not as efficient as those in developed countries. Recently, many management scholars have maintained that establishing large and diversified business conglomerates based Asia Pacific J Manage (2008) 25:71-91

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“…Although the potential benefit of banking deregulation in Taiwan is generally accepted (Chung 2006;Kao & Liu 2004;Liu & Hung 2006), one negative consequence of the expansion of banking services is that financial institutions in the country have increasingly taken on more risk in their quest to gain customers, resulting in an increase in the reported rate of bad loans (Chen & Shih 2006;Li 2005;Wang et al 2008). One approach financial institutions have employed to manage risk associated with bad loans is the credit risk assessment of potential borrowers using credit scoring models (De Andrade & Thomas 2007;Maggi & Guida 2011;Thomas, Oliver & Hand 2005).…”

Section: Introductionmentioning

confidence: 99%

Modelling the predictive performance of credit scoring

2013

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Orientation:The article discussed the importance of rigour in credit risk assessment.Research purpose: The purpose of this empirical paper was to examine the predictive performance of credit scoring systems in Taiwan.Motivation for the study: Corporate lending remains a major business line for financial institutions. However, in light of the recent global financial crises, it has become extremely important for financial institutions to implement rigorous means of assessing clients seeking access to credit facilities.Research design, approach and method: Using a data sample of 10 349 observations drawn between 1992 and 2010, logistic regression models were utilised to examine the predictive performance of credit scoring systems. Main findings:A test of Goodness of fit demonstrated that credit scoring models that incorporated the Taiwan Corporate Credit Risk Index (TCRI), micro-and also macroeconomic variables possessed greater predictive power. This suggests that macroeconomic variables do have explanatory power for default credit risk. Practical/managerial implications:The originality in the study was that three models were developed to predict corporate firms' defaults based on different microeconomic and macroeconomic factors such as the TCRI, asset growth rates, stock index and gross domestic product. Contribution/value-add:The study utilises different goodness of fits and receiver operator characteristics during the examination of the robustness of the predictive power of these factors.

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Managerial ties, control and deregulation: An investigation of business groups entering the deregulated banking industry in Taiwan

Abstract: Business groups, Managerial ties, Social capital, Agency theory,

Cited by 52 publications

References 44 publications

An institution-based view of international business strategy: a focus on emerging economies

An institution-based view of international business strategy: a focus on emerging economies

Social capital and cross-selling within financial holding companies in an emerging economy

Modelling the predictive performance of credit scoring

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