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a b s t r a c tThe Taiwan Quality Indicator Project (TQIP) is a quality management program that measures and monitors the healthcare quality of hospitals in Taiwan. This paper examines the impact of TQIP participation on hospital productivity growth with the application of the Malmquist productivity change index based on data envelopment analysis (DEA). Analyzing operations data from 31 TQIP regional hospitals over the period 1998-2004, we find that TQIP hospitals improved their productivity in the post-TQIP period. This improvement is attributable to quality change and relative efficiency progress. The simultaneous enhancement in both quality and relative efficiency coincides with the philosophy of total quality management (TQM) spirit, and confirms the efficiency improvement and quality assurance functions of TQIP.

Purpose -The aim is to investigate the effects of the first financial restructuring (FFR) on productivity growth, technical progress and efficiency change, using data from 42 commercial banks in Taiwan from 2001 to 2004. Design/methodology/approach -Data envelopment analysis is applied to compute the Malmquist index of productivity change. Findings -It is found that Taiwan commercial banks on average experienced a 117.39 percent increase in productivity growth, of which is 2.11 percent is due to efficiency change and 115.28 percent to technical progress over the four year period. In addition, during the four year period, a 1 percent reduction in the nonperforming loan ratio resulted in 1.85 percent growth in productivity; a 1 percent increase in the capital adequacy ratio led to 2.15 percent growth in productivity. Practical implications -It can be concluded that after the FFR, the productivity growth, technical progress, and efficiency change all improve, with the lower nonperforming loan ratio contributing to this improved performance. Originality/value -The study provides evidence of the productivity change of the banking industry in Taiwan in response to the FFR. It also contributes additional empirical evidence on the impact of a reform on bank productivity in a developing country.

Purpose -The purpose of this paper is to examine the impact of merger and acquisition (M&As) of "second financial restructuring" (SFR) on the productivity growth of commercial banks in Taiwan. Design/methodology/approach -The paper uses the Malmquist productivity change index to evaluate the changes from pre-SFR to SFR period and from pre-SFR to post-SFR period. In addition, the bootstrapping regression method is applied to examine the relationship of SFR policy and productivity change. Findings -Merged banks have improved their productivity and scale efficiency after the M&As program of SFR. In addition, the greater productivity growth of merged banks than non-merged banks is attributed to small-sized and private-voluntary merged banks. Furthermore, the small-sized merged banks have greater productivity growth and scale efficiency improvement than the big-sized merged banks, and the government-mandatory merged banks have lower productivity growth than private-voluntary merged banks after the SFR. Research limitations/implications -This study has an academic implication for providing additional empirical evidence related to the impact of government M&As policy on bank productivity growth in the developing countries. Practical implications -The findings on this paper have implications for financial reform policy and banking management on M&As activity, in particular, as they clarify the differential effects of big-sized vs small-sized and government-mandatory vs private-voluntary merged banks. Originality/value -Understanding the impacts of financial reform is particularly important as the banking industry has become increasingly competitive. This paper contributes to this area by assessing the impact of the M&As policy of SFR on productivity growth and evaluating differential effects of M&As.

Taiwan initiated the integrated income tax system (IITS) in 1998. There were two parts in IITS including the dividend imputation tax credits (DITC) and 10% tax on the undistributed retained earnings (URE). The DITC provided the shareholders with a credit to offset personal tax on dividend income and eliminated the double taxation on corporate income. We examined the IITS impacts on the capital investments between Taiwan and Mainland China. We found that the companies with higher DITC ratio decreased the capital cost and resulted in more capital investments in Taiwan rather than Mainland China. However, the companies with higher URE bared extra 10% tax burden and deteriorated the fund accumulation. The companies with higher URE ratio demonstrated higher capital investment in Taiwan opposed to the research hypothesis. The authority charging 10% tax on URE was intended to avoid the big shareholders tax evasion and reluctant to distribute to the shareholders. The tax addition policy did not accomplish the original policy mission. The retained earnings were still not distributed to the shareholders and maintained for internal fund needs. Compared to investment in Taiwan, the higher URE ratio presented less capital investment in Mainland China without statistics significant. Taiwanese policy of 40% net worth ceiling limitation on Mainland China investment was the possible reason for less investment. The ceiling limitation triggered the subsidiary company in Mainland China to not incline to wire the profit to the parent company in Taiwan and reinvest the profit in the plant expansion and 100% fully tax reimbursement. This tax addition charge did not affect the investment in Mainland China. Our empirical study supported that the DITC led to negative influence to the capital investment in Mainland China but not the only determinant of investment consideration. Our authority might modify the dividend wire back mechanism and cancel the 40% net worth ceiling of investment in order to attract more capital back to the efficiency market.