Volume 18, Number 1, June 2023
| The Relationships among SME Lending, Credit Guarantee, and Dynamic Efficiency of Banks in Taiwan |
Abstract
In view of the importance of the development of small- and medium-size enterprises (SMEs) and the financing problems they face, this research uses data of 30 Taiwan’s banks from 2006 to 2017, employs the Dynamic Slacks-Based Measure (DSBM) of Tone and Tsutsui (2010) to estimate their dynamic efficiency, and then explores the impacts of lending to SMEs, credit guarantees, and control variables on that dynamic efficiency. The research results show that increasing the loan ratio of SMEs or reducing the ratio of credit guarantees decreases the dynamic efficiency of banks. Furthermore, in terms of interaction, if banks lend to SMEs under a credit guarantee system, then there is a significantly positive impact on the dynamic efficiency of Taiwan’s banking industry.
Keywords: SME Lending, Credit Guarantee, Dynamic Efficiency, Dynamic Slacks-Based Measure
JEL Classification: G21, G13