A Research of the Ownership Structure, Corporate Governance and Firm Value for Taiwan Publicly Listed Conpanies
Since the Asian financial crisis in 1997, several researches for the East Asian have found that concentration of ownership higher than other areas and weak corporate governance have been important reasons of financing crisis. Therefore, the study adopts the method developed by La Porta, Lopez-de-Silanes and Shleifer (1999), which traces the chain of ownership to find who has the most voting rights, identifies their ultimate control patterns, finds the controlling shareholders of firm, and then calculates each ultimate owner¡¦s control rights and cash flow rights. We also try to find the relationship between those ways of controlling shareholders to the voting rights, cash flow rights, and the degree of control rights deviating from cash flow rights.
In Addition, we regress to the Proxy Q on controlling shareholders¡¦ control rights deviating from cash flow rights, then examine the evidence on expropriation of minority shareholders. This paper investigates whether the board construction on corporate governance mechanism effectively discharge its monitoring function and mitigate central agency problem.
The research data are collected from the publications of those companies that stocks are openly traded on the Taiwan Stock Market between 2000 and 2003 April. There are 183 validated observations which are obtained. Empirical result suggests¡G
1. The high concentration of ownership is more common in Taiwan publicly listed companies and those firms are typically controlled by families.
2. The controlling shareholders typically have power over firms significantly in excess of their cash flow rights because they through the use of pyramids, cross-holdings, paper company and participation in management. And the condition of family control company is the worst.
3. The more the controlling shareholders¡¦ cash flow rights, the better performance of the firm.
4. For Taiwan publicly listed companies, the corporate governance mechanism could not effectively discharge its monitoring function and mitigate central agency problem.
Advisor:Jen-Jsung Huang; Anlin Chen; Chin-Shun Wu
School:National Sun Yat-Sen University
School Location:China - Taiwan
Source Type:Master's Thesis
Keywords:agency problem firm value ownership structure corporate governance
Date of Publication:07/23/2003