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What Is The Relation Between Non-Performing Loans, Corporate Governance, And Lending Behavior Factors?

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  • JOE-MING LEE

    (Department of Applied Economics, Fo Guang University, Add. No. 160, Linwei Rd., Jiaosi Shiang, Yilan County 26247, Taiwan, ROC)

Abstract

This research highlights the special problems facing the corporate governance of financial intermediaries and combines this theoretical perspective with bank observations in order to offer policy recommendations for their industry. The standard agency theory defines the corporate governance problem in terms of how equity and debt holders influence managers to act in the best interests of those providers of capital to firms. The results show that the relationship between directors’ collateralized shares, loan concentration and a bank’s non-performing loans has a significant positive, indicating that bad corporate governance and loan concentration are important warning signs for banks.

Suggested Citation

  • Joe-Ming Lee, 2023. "What Is The Relation Between Non-Performing Loans, Corporate Governance, And Lending Behavior Factors?," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 68(05), pages 1637-1650, September.
    • Handle: RePEc:wsi:serxxx:v:68:y:2023:i:05:n:s0217590819500590
    DOI: 10.1142/S0217590819500590
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    More about this item

    Keywords

    Loan concentration; non-performing loans; corporate governance; lending behavior;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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