An Empirical Study on the Relationship between Corporate Governance and Foreign Investment
Date Issued
2004
Date
2004
Author(s)
Du, Wen-Jia
DOI
zh-TW
Abstract
In order to promote the liberalization and internationalization of stock market, from 1991,the government has been devoted to decontrol the invest limit on QFII. Thus, foreign investors have been pooling more and more into Taiwan’s stock market. Furthermore, due to their highly profitable performance, the actions of foreign investors’ effects on stock market, which are even much more than its real investment number, have been more and more important.
On the other hand, owing to the importance of corporate governance, the governments all over the world are making much efforts to enhance corporate governance, wishing to promote the prosperity of stock market. Therefore, this research is focused on whether corporate governance affects foreign investors’ investment strategies and actions.
This research utilizes regression models in three ways,” all years”, ”every industry”, and “ every year”, and adopted corporate governance variables include scale of the board and the inspectors, the holding rate of the board and the inspector, the holding rate of primary shareholder, managers, trust funds, government, and corporations, the degree of concentration of shares, and two dummy variables, “whether the chairman and chief official executive is the same person”, and “whether the company’s CPA firm ranks the first four” .
According to the results, in “all years” model, all other variables except “the scale of inspectors”, “ the holding rate of government, trust funds, and corporations” are positively related with foreign investment. On the other hand, in” every industry” model, the results are similar to “all years” model while industry factors still influence foreign investors’ considerations.
In “every year” model, time series analysis method from Fama and MacBeth(1973) is adopted. The regression results are similar to the previous two models, which imply that all other variables except “the scale of inspectors”, “ the holding rate of government, trust funds, and corporations” are positively related with foreign investment.
Key words：Foreign investment ; Corporate governance.
Subjects
外資
公司治理
foreign investement
corporate governance
Type
other
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