Measuring the efficiency of securities companies by corporate governance in a financial holding and non-financial holding system

This paper applies data envelopment analysis (DEA) and a Tobit regression model with corporate governance variables to analyze and compare the operational efficiency of 14 securities companies in financial holding system, and 12 in non-financial holding system in Taiwan. The results suggest four commonalities in the modules. (1) A securities company's operating results can be enhanced when joining the financial holding system. (2) Board size does not affect the efficiency of a securities company. (3) The holding of concurrent posts of president and general manager would not affect a securities company's operating performance. (4) An increase in the average director bonus would reduce company efficiency. In addition, there are two differences. (1) An increase in the major shareholders' shareholding ratio would increase the operational efficiency of a securities company that has joined the financial holding system: however, the impact on those in the non-financial holding system would be insignificant. (2) Profit from the sale of securities would increase the efficiency of a securities company in a non-financial holding system but would not lead to an increase of those in the financial holding system. Crown Copyright (C) 2009 Published by Elsevier Ltd. All rights reserved.