Building a Corporate Governance Index from the Perspectives of Ownership and Leadership for Firms in Taiwan

Chen, Anlin; Kao, Lanfeng; Tsao, Meilan; Wu, Chin-Shun

doi:10.1111/j.1467-8683.2007.00572.x

Cited by 99 publications

(71 citation statements)

References 26 publications

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“…CEO duality, 2. size of the board of directors, 3. managements' holdings and 4. block shareholders' holding. Chen et al (2007) find that CGI is successful in evaluating the effectiveness of the governance mechanism of firms in Taiwan. We will construct the CGI for each firm of interest, and use this index as a proxy variable to represent the effectiveness of the corporate governance structure.…”

Section: Data and Variable Constructionmentioning

confidence: 98%

“…"Corporate Governance Index" (CGI) are built for each firm based on Chen et al (2007). CGI is comprised of four different aspects of the company's governance mechanism: 1.…”

Section: Data and Variable Constructionmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

“…We choose the related corporate governance variables following Chen et al (2007). Considering the database collected in Taiwan and market characteristics, Chen et al (2007) find that CGI is successful in evaluating the effectiveness of the governance mechanism of firms in Taiwan. Farber (2005) uses a sample of 87 firms that are identified by SEC as fraudulently manipulating their financial statements, and unveils the positive association of corporate governance and stock performance.…”

Section: Methodsmentioning

confidence: 99%

“…We then focuses on identifying the factors affecting the length of time required for losing firms' abnormal returns to change the direction of their movement. What is unique in this study is that we introduce two well-developed variables as proxies for information transparency and corporate governance (Chen, Kao, Tsao, & Wu, 2007) which are not used in previous studies relating to inter-firm litigations. These two variables are computed based on data from local database and turn out to be indicative and informative.…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

The Time Needed to Rebound after Firms Lost in Litigations: The Role of Information Transparency

Li¹,

Tang²,

Tang³

2015

IJEF

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There are abundant researches on the negative effects of litigation. It is acknowledged that litigation can cause wealth leakage when we consider the stock returns of both parties involved. In this study, we use the data of listed electronic and computer-related firms in Taiwan to study the behaviors of long-run abnormal stock returns of the losing firms around the time of litigation judgments and thereafter. We apply event study and threshold regression to examine the existence of long-run abnormal stock returns reversion. Then use OLS to find out factors affecting the length of time needed to reverse the downward trend of abnormal returns. After a period of time, the trends of abnormal stock returns are reversed. The higher level of information transparency the firm is to the market, the faster the reversion occurs. The quality of corporate governance is also negatively correlated to the length of time of reversion.

show abstract

Section: Data and Variable Constructionmentioning

confidence: 98%

“…"Corporate Governance Index" (CGI) are built for each firm based on Chen et al (2007). CGI is comprised of four different aspects of the company's governance mechanism: 1.…”

Section: Data and Variable Constructionmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

The Time Needed to Rebound after Firms Lost in Litigations: The Role of Information Transparency

Li¹,

Tang²,

Tang³

2015

IJEF

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Dual‐board governance and board independence: Conglomerate affiliate versus standalone firms

Uddin,

Najaf,

Hassan

et al. 2023

Int. J Fin Econ

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We argue that the corporate board of an exchange‐listed firm cannot make an independent business decision if it has an affiliation with a conglomerate group. This is because the corporate board of a conglomerate‐affiliated firm (CAF) has high moral hazard exposure due to its accountability to the superior parent board at the apex of the conglomerate structure. Based on a sample of 304 listed firms from 18 countries, we find a CAF board is less independent than a standalone board with no superior reporting body. A firm's affiliation with the conglomerate per se affects its board independence, regardless of the parent shareholding level. The additional analysis finds that the lack of board independence significantly impacts a CAF's financial performance, although the market impact is insignificant.

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Does corporate governance affect investment efficiency of Indian firms? Panel evidence from new governance indices

Yadav,

Yadav

2024

J Corp Accounting Finance

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This study examines the effects of corporate governance (CG) on investment inefficiency for 506 Indian listed firms. Using new stipulations of CG and globally recognized governance practices, an overall corporate governance index (CGI) and five sub‐indices such as board index (BINDEX), audit index (AINDEX), ownership index (OINDEX), nomination and remuneration index (NRINDEX), and disclosure index (DINDEX) were constructed. Employing newly developed governance indices along with firm‐specific control variables, several pooled regression models were estimated. Robustness checks were conducted using two‐step system GMM and an alternate measure of managerial investment efficiency. The pooled estimated coefficient of CGI and sub‐indices (except OINDEX) on investment inefficiency, overinvestment and underinvest is found to be negative and significant suggesting that effective/robust governance at firm level reduces investment inefficiencies (improves investment efficiency) through effective supervision and monitoring thereby reducing the opportunistic behavior of managers.

show abstract

Building a Corporate Governance Index from the Perspectives of Ownership and Leadership for Firms in Taiwan

Cited by 99 publications

References 26 publications

The Time Needed to Rebound after Firms Lost in Litigations: The Role of Information Transparency

The Time Needed to Rebound after Firms Lost in Litigations: The Role of Information Transparency

Dual‐board governance and board independence: Conglomerate affiliate versus standalone firms

Does corporate governance affect investment efficiency of Indian firms? Panel evidence from new governance indices

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