臺大管理論叢 NTU Management Review VOL.29 NO.1

CEO Incentives and Bank Liquidity Management 308 Table 11 The Relation between Bank Return on Asset and CEO Incentives: 2SLS Model Results This table presents the 2-stage least square results of second stage estimation between bank expected liquidity holdings and bank return on asset from 1992 to 2012. The expected value of bank liquidity is expected from the regression specification in Table 9. We divided our research period into two different sub-periods. The pre-financial crisis period is 1992 to 2006, and 2007 to 2012 is the post- crisis period. All variables are as defined in the Appendix and winsorized at the 5th and 95th Independent Variable 1. CEO cash bonus 2. CEO equity incentive ($) 1992-2012 1992-2006 2007-2012 1992-2012 1992-2006 2007-2012 (1) (2) (3) (4) (5) (6) Panel A: All banks Constant 0.025 0.010 0.062 0.025 0.012 0.055 (5.83)*** (3.90)*** (4.43)*** (5.33)*** (4.81)*** (3.90)*** Bank Liquidity i,t-1 0.004 0.010 0.009 0.008 0.008 0.012 (0.88) (3.97)*** (0.47) (1.70)* (3.67)*** (0.72) Share of Deposit Financing i,t-1 -0.003 0.001 -0.022 -0.002 0.002 -0.022 (-0.94) (0.60) (-2.05)** (-0.65) (0.99) (-2.07)** Loans i,t-1 -0.010 0.002 -0.037 -0.015 0.0002 -0.043 (-4.29)*** (1.45) (-4.23)*** (-5.85)*** (0.12) (-4.81)*** Bank size i,t-1 -0.0002 -0.0001 -0.001 0.0002 0.00003 0.0001 (-0.83) (-0.38) (-0.79) (0.61) (0.26) (0.17) Non-interest income ratio i,t-1 -0.013 -0.004 -0.035 -0.016 -0.008 -0.028 (-4.60)*** (-2.58)*** (-3.50)*** (-4.89)*** (-4.47)*** (-2.68)*** Fixed effect Yes Yes Yes Yes Yes Yes N 1,202 928 274 1,238 915 323 Overidentification test, J -statistic (7.17) (20.86) (6.44) (7.05) (22.38) (4.49)