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To test the above proposition, I conduct the empirical analysis in three steps. In the first step, I investigate foreign banks’ management model by surveying 13 major foreign banks locally incorporated in Mainland China. The results suggest that these 13 foreign banks can be categorized into three distinct groups based on their management model: intergrators, customer-followers, and parent-followers. The results also indicate that intergrators have the highest level of localization while parent-followers have the lowest level of localization.
In the second step, I conduct DEA (Data Envelope Analysis) and CAMEL (Capital Adequacy, Asset Quality, Management, Earnings, Liquidity Analysis) to assess the operating efficiency of these 13 foreign banks. The assessment is conducted in two ways: 1) the inter-group comparison between foreign banks and local Chinese banks; 2) the intra-group comparison between the three distinct groups of foreign banks identified in the first step. The results indicates that the principal factor driving the operating efficiency of both local Chinese banks and foreign banks is the comprehensive technical efficiency, which includes both the quality of management and the quality of technical elements. I also find the uptrend of technical efficiency of the integrators is more stable than that of the other two groups of foreign banks.
Finally, I integrate the results from step one and step two to assess the relevance between foreign banks’ localization level and operating efficiency. I find that foreign banks that score higher in localization tend to have a higher level of operating efficiency. Although this finding is not conclusive about the causal relationship between localization and operating efficiency, it nevertheless suggests that the management model of the higher performing integrators can serve as references for the other foreign banks attempting to enhance their localization and operating efficiency. I also discuss the future trends of development in the banking industry in China and what foreign banks can learn from local Chinese banks to improve their market positions.
This article discusses the effects of the compensation system and employee incentives on business performance in banking in two areas. First of all, based on the statistics on the banking sector in Taiwan, it explores the regulating effects of different compensation systems on two conflicts in the industry. It also reviews the literature on Conflict Theory. Research shows that when people trust each other, they tend to accept a value statement different from theirs. And our research also shows that trust can minimize task conflict and relationship conflict between team members. Moreover, after identifying the role of compensation structure to trust and task conflict, this article further categorizes the structure into team performance reward and individual performance reward. Analysis points out that when the organization bases compensation payment on team performance reward, the relationship between trust and task conflict is higher than that on individual performance reward. That is, team performance reward better helps to reinforce such correlation compared to individual performance reward.
Second, the research studies different forms of employee incentives in Taiwan’s banking sector as well as resulting performance. During the studied period, the majority of the financial institutions preferred cash bonus. In addition, financial institutions also take other incentives. Cash bonus covered the highest percentage, followed by share bonus, treasury repo and transfer, and options in order. We study the ROEs under different incentives and conclude it is higher and more stable in the institutions offering multiple employee shares instead of single method. Whether the incentives are implemented also influence the level of net ROE.
Compulsory education and school laws were enacted in the British colonies of North America beginning from the 1640s. Compulsory school laws were gradually enacted in all states of the United States of America between 1852 and 1918, with enforcement of the laws following gradually and but unevenly in the various states. Today, most states require attendance up to age 16. Music was gradually introduced to the elementary school curriculum from the 1830s. Today, music is mandatory for all (general) students in Grades 1-6 in most schools and in some schools in Grades 7-8, and is an elective subject in most schools in Grades 7-12. General music classes in the U.S. are similar to compulsory music classes in many other countries. Approximately 25 percent of American public secondary school students participate in elective music performing ensembles, which are a distinctive and positive feature of American music education.