Open Access
American Research Journal of Business and Management
ISSN (Online): 2379-1047
DOI: 10.46568/arjbm
An Empirical Study on Loan Concentration and Business Performance–Case of 3D1S Industries in Taiwan
Ph.D. student of department of Economics, SooChow University, Taiwan.
Abstract
The paper first analyze the loan concentration of Taiwan industries between year 1990 to 2014. The
high five industries are orderly as finance, shipping, tourism, semi-conductive and steel, respectively. However,
DRAM, LED, LCD and Solar are the four supporting industries in Taiwan. Yet, they were in financial crisis
through the change of domestic and foreign economic environment. The government try to rescue these
industries, it will lead to the high loan concentration. Not only affect the business performance, but also increase
the non-performing loans. In empirical study, the paper apply panel data regression model with fixed effect to
discuss the relationship of loan concentration on return of asset(ROA). The results show that the coefficient of
loan concentration is negative. Which implies that the high loan concentration will decrease the ROA of
industries and banking.
