• ISSN: 2301-3567 (Print), 2972-3981 (Online)
    • Abbreviated Title: J. Econ. Bus. Manag.
    • Frequency: Quarterly
    • DOI: 10.18178/JOEBM
    • Editor-in-Chief: Prof. Eunjin Hwang
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HOME > Archive > 2020 > Volume 8 Number 3 (Aug. 2020) >
JOEBM 2020 Vol.8(3): 169-174 ISSN: 2301-3567
DOI: 10.18178/joebm.2020.8.3.632

How Female Directorship Affect Banks’ Profitability – An Application of Threshold Regression Model

T. Thanh Binh Nguyen and Zi-Yu Chen

Abstract—This paper uses the panel data of 26 Taiwanese commercial banks in 1999-2019 to test the relationship between bank female directorship and bank profitability. The main contribution of this paper is to explain whether bank female directors are effective in promoting banks in profitability; and how the relationship between female directorship and bank profitability change when considering their total assets as well as capital adequacy ratios. The model with unknown breakpoints is applied for selecting the best threshold values for testing the asymmetric effect of female directorship on bank performance. We find that Female directorship has an inconsistent effect on bank profits when the capital adequacy ratio is taken into consideration. Banks with high capital adequacy ratio weaken or even reduce the positive relationship between bank female directors and bank profitability. Meanwhile, we also find that banks with total assets higher than TW$1616 billion have the opposite effect on ROA relative to the rest of banks. This result proves that the estimation of traditional panel regression may not fully present the possible relationships between variables.

Index Terms—Taiwanese banks, board structure, female directorship, breakpoints, JEL: G21; G28; G30; G32; G3.

Nguyen Thi Thanh Binh and Zi-Yu Chen are with Department of Accounting, Chaoyang University of Technology, 168 Jifong E. Road, Wufong District, Taichung City, 41349, Taiwan (e-mail: tbnguyen@cyut.edu.tw, first5201793@gmail.com).

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Cite:T. Thanh Binh Nguyen and Zi-Yu Chen, "How Female Directorship Affect Banks’ Profitability – An Application of Threshold Regression Model," Journal of Economics, Business and Management vol. 8, no. 3, pp. 169-174, 2020.

Copyright © 2020 by the authors. This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).

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