The Corporate Governance and Financial Performance –Evidence from Taiwan’s Listed and OTC Firms
Date Issued
2015
Date
2015
Author(s)
CHENG, CHUN-YEN
Abstract
Recalling the 1997 Asian financial crisis plunged the economic and financial development in many countries, waking Asian countries of corporate governance (Corporate Governance) attention. After 1990''s, the Asian Corporate Governance imperfect system, is considered to be one of the many reason of the financial turmoil. Definition of World Bank (1999) corporate governance: From the company perspective, corporate governance refers to the norms of law and in compliance with the contract, the company set up to promote the value maximization mechanism, and that the company''s decision-making institution , the Board of Directors, namely the Board of Directors must balance the benefits of shareholders and various stakeholders in order to create long-term benefits of the company. Another view to the public to discuss corporate governance mechanisms to promote investment in human well-being of society as a whole, and urge enterprises to comply with the contract and the law under the premise of the establishment of a monitoring mechanism in order to achieve the goal of maximizing the value of enterprise, this view of the highest decision-making institution means business, that is, the ""Company"", must safeguard the benefits of all stakeholders and shareholders to create long-term profits, and achieve sustainable development goals. According to article 202 of the Companies Act provides that: ""the implementation of the company''s business, the line of the resolution by the board"", can be seen as the highest level of the board of directors of a business decision, structure and independence of the board of directors will have a direct impact on the value of the company, and the company Governance is to protect the rights of interested parties and shareholders, ownership structure which will have agency problems, so the purpose of the board of directors of the company to monitor the manager''s behavior, reduce agency problems, thereby creating company value. In the foregoing of the space-time background, and there is the need for corporate governance and the establishment of existence, but in order to prevent and reduce agency costs, the establishment of the company''s management and supervision mechanism, keeping the company''s business and the pursuit of one of the greatest investment income. All these reasons then have produced this study, few previous studies of corporate governance variables, such as Morck et al (1988), McConnell and Servaes (1990), Yermack (1996), usually in the ownership structure of corporate governance variables, and then discusses equity Structure and Performance of relevance.In this article with directors, supervisors and structure as well as external people, and to explore whether the company''s performance has relevance, this study selected 2005 to 2013, a total of nine years in Taiwan listed counters company information, Excluding incomplete data gaps, select the financial industry, traditional industry and electronics industry as our main object of analysis is divided into four groups, namely, the whole financial sector, traditional industries and electronics industries, respectively Under Corporate Governance for the company affect performance and what is the difference between different industries. This paper added nine explanatory variables and two control variables and to ROE for business performance variables, the use of tracking data (Panel Data) analysis method was used to identify the various groups for the test mode for analysis. This article find the differences between industries affect the operating performance of the company in a different direction, draw the two groups (finance) manager shareholding ratio in the negative direction, the group of four (electronics) is positive. Directors and supervisors pledge ratio in group two (financial sector) is positive, the group of four (electronics) is negative. In terms of the ratio of independent directors accounting for directors, supervisors and group of two (financial sector) is negative, the group of three (traditional industries) is negative. Legal aspects of institutional ownership groups of three (traditional industries) is positive, and groups of four (electronics) is also positive, all the results is same. In terms of company size, group three (traditional industries) is positive, different from group two (finance) and group IV (electronics industry) negative. As for the debt ratio aspect, group two (financial sector) is positive, the group of three (traditional industries) is negative.
Subjects
Corporate Governance
ROE
the Board of Directors
the financial turmoil
Type
thesis
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