A Study of the Correlation Between Taiwanese Financial Holding Companies'' Business Diversification and the Synergy Effect

• Main Authors: Shiu-Luan Lee, 李秀鑾
• Other Authors: Chang-Chiun Cheng
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/06683009685438480763

碩士 === 銘傳大學 === 財務金融學系碩士在職專班 === 98 === The subjects in this study are 13 domestic financial holding companies and their subsidiaries. The Herfindahl-Hirshman Index is used to measure financial holding companies’ business diversification level, and the Regression Model is used to explore the correlation between the level of diversification and the business performance of financial holding companies and their banking subsidiaries. Empirical results: 1. A lower level of financial holding companies’ diversification can improve the earnings-per-share business performance. 2. For financial holding companies with banking as their main business, their business performance and financial holding property are not positively significant, while for financial holding companies with insurance as their main business, their business performance and financial holding property are positive and significant. This shows that the integrated performance of financial holding companies with insurance as their main business has a positive synergy effect. 3. Affected by financial holding companies’ diversification, the performance of banking subsidiaries are not empirically significant. This means that the business performance of banking subsidiaries is in fact not significantly affected by financial holding companies’ diversification. This may be due to the fact that Taiwan''s financial holding companies are mostly banking oriented, and the banking business itself is already sufficiently diversified; therefore, the synergy effect from financial holding companies’ diversification is not so remarkable on the performance of the banking business. Another reason could be that due to a less than 10 years of history of financial holding companies in our country, the long-term synergy effect may not have yet fully appeared. Key words: financial holding companies, diversification, synergy effect, business concentration, financial holding property, absolute value, relative value.