Professor of Department of Banking and Finance, Tamkang University
Abstract:
This paper aims to investigate the effect of business cycles on financial industries in Taiwan and further to examine whether the real estate market affect the behavior of stock price by sorting the financial holding companies and commercial banks. Empirical results show that there is not significant effect between the real estate market and commercial banks during business expansion period, but the real estate market have positive effect in financial holding companies in because of the influences of both the cost of funds and the purchase intentions in real estate market. In the momentum effect, this study also confirms that market investors have commonly irrational investment behaviors in commercial banks during business expansion period, and all companies will present negative significantly sensitivities when the expected interest rate change.
