The Effect of Enhancing Investor Protection under Corporate Governance Reform: Evidence from Cash Dividend Perspective
Date Issued
2012
Date
2012
Author(s)
Lee, Te-Kuan
Abstract
Prior studies indicate cash dividends play a basic role in limiting controlling shareholders’ expropriation. In practice, several business scandals in Taiwan, such as Procomp Inc. and several firms belonging to Rebar Group have distributed zero cash dividends over a long period of time. Also, the Taiwan government had promoted “Balance Dividend Policy” since 2000. Thus, the dissertation examines the impact of “Balance Dividend Policy” and investigates the effect of individual monitoring mechanisms of corporate governance on cash dividends under governance reform context in Taiwan.
Empirical results suggest the positive impact of the “Balance Dividend Policy”. Findings also show that the presence of the second-largest shareholder along with the promotion of “Balance Dividend Policy” upgrade firms’ cash dividend levels. Further, cash dividends increase while the ratio of independent director increases. Meanwhile, the above findings offer insights to regulators that the presence of relatively large second largest shareholders only make firms’ cash dividends increase after the promotion of “Balance Dividend Policy”. In other words, second largest shareholders need the dividend guidelines, such as “Balance Dividend Policy” to induce their monitoring effect on cash dividend. Furthermore, this study also suggests that the stricter definition of independent directors together with the explicit dividend guidelines constitutes the implicit monitoring duties of independent directors.
Subjects
Corporate Governance
Dividend Policy
Independent Director
Second largest shareholder
Balance Dividend Policy
Type
thesis
File(s)![Thumbnail Image]()
Loading...
Name
ntu-101-D93722004-1.pdf
Size
23.32 KB
Format
Adobe PDF
Checksum
(MD5):4498f98e2e49582eaedef998eb8f493a