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Does Corporate Governance and Ownership Structure Influence Performance? Evidence from Taiwan Life Insurance Companies

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  • Li-Ying Huang
  • Tzy-yih Hsiao
  • Gene C. Lai

Abstract

This study examines the relation between corporate governance and performance and the relation between ownership structure and performance in the Taiwanese life insurance industry. We use the value-added approach of data envelopment analysis (DEA) to measure performance. For our first performance measure, which uses premium income as the output variable, we find evidence that proportion of management shareholding, family-controlled insurers, foreign branch insurers, and insurer age are generally significantly positive related to technical efficiency. The relation between the above variables and allocative efficiency and cost efficiency is similar, but very weak. For our second performance measure, which uses claim benefit as output variables of the value-added approach, the results are similar but weaker. The two most consistent variables that have a positive impact on efficiency are family controlled insurer and insurer age.

Suggested Citation

  • Li-Ying Huang & Tzy-yih Hsiao & Gene C. Lai, 2007. "Does Corporate Governance and Ownership Structure Influence Performance? Evidence from Taiwan Life Insurance Companies," Journal of Insurance Issues, Western Risk and Insurance Association, vol. 30(2), pages 123-151.
    • Handle: RePEc:wri:journl:v:30:y:2007:i:2:p:123-151
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    Cited by:

    1. Kuan-Chen Chen & Chung-I Lin, 2020. "Studies on the Determinants of Efficiency in Taiwanese Life Insurance Industry - Application of Bootstrapped Truncated Model," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 10(1), pages 1-4.
    2. Hu, Jin-Li & Yu, Hsueh-E, 2014. "Risk management in life insurance companies: Evidence from Taiwan," The North American Journal of Economics and Finance, Elsevier, vol. 29(C), pages 185-199.
    3. Muhammad Nabeel & Basel Ali & Allam Hamdan, 2019. "Real-Time Feedback on Consumer s Behavior: Literature Review," International Journal of Energy Economics and Policy, Econjournals, vol. 9(5), pages 489-493.
    4. Mamdouh Abdulaziz Saleh Al-Faryan & Jassem Alokla, 2023. "Do Publicly Listed Insurance Firms in Saudi Arabia Have Strong Corporate Governance?," Economies, MDPI, vol. 11(1), pages 1-41, January.
    5. Simona Cosma & Rossella Leopizzi & Simone Pizzi & Mario Turco, 2021. "The stakeholder engagement in the European banks: Regulation versus governance. What changes after the NF directive?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(3), pages 1091-1103, May.
    6. Thomas R. Berry‐Stölzle & Muhammed Altuntas, 2010. "Feature Article: A Resource‐Based Perspective on Business Strategies of Newly Founded Subsidiaries: The Case of German Pensionsfonds," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 13(2), pages 173-193, September.
    7. He, Yan & Chiu, Yung-ho & Zhang, Bin, 2015. "The impact of corporate governance on state-owned and non-state-owned firms efficiency in China," The North American Journal of Economics and Finance, Elsevier, vol. 33(C), pages 252-277.
    8. Beatriz Cuadrado‐Ballesteros & Jennifer Martínez‐Ferrero & Isabel M. García‐Sánchez, 2017. "Board Structure to Enhance Social Responsibility Development: A Qualitative Comparative Analysis of US Companies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 24(6), pages 524-542, November.
    9. Akbar, Muhammad & Hussain, Shahzad & Ahmad, Tanveer & Hassan, Shoib, 2020. "Corporate Governance and Firm Performance in Pakistan: Dynamic Panel Estimation," CAFE Working Papers 6, Centre for Accountancy, Finance and Economics (CAFE), Birmingham City Business School, Birmingham City University.
    10. Huang, Tai-Hsin & Lin, Chung-I & Wu, Ruei-Cian, 2019. "Assessing the marketing and investment efficiency of Taiwan’s life insurance firms under network structures," The Quarterly Review of Economics and Finance, Elsevier, vol. 71(C), pages 132-147.
    11. Ender BAYKUT & Fatih ECER & Ismail KARA, 2016. "A DEA-MALMQUIST Index Application to Analyze Inefficiency Reasons of BIST Corporate Governance Index Companies," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 1, pages 14-24.
    12. Li‐Ying Huang & Yu‐Luen Ma & Nat Pope, 2012. "Foreign Ownership and Non‐Life Insurer Efficiency in the Japanese Marketplace," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 15(1), pages 57-88, March.
    13. Abdul Latif Alhassan & Nicholas Biekpe, 2018. "Competition and Risk-Taking Behaviour in the Non-Life Insurance Market in South Africa," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 43(3), pages 492-519, July.

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