Effects of governance on investment decisions and perceptions of reporting credibility: Investment experience of Taiwanese individual investors

Chang, Ronald Y.; Wei, Jo-Ting

doi:10.1007/s10490-010-9226-4

Cited by 24 publications

(32 citation statements)

References 37 publications

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“…Corporate governance mechanisms, commonly the assignment of independent directors, was considered by our participants (F8; F10; F13; R15), which is consistent with Chang and Wei (2011). However, our participants viewed management credibility and integrity as more important than the presence of independent directors.…”

Section: Impressions Of Integrated Reportingsupporting

confidence: 70%

“…However, Holm and Rikhardsson (2008) and Cohen et al (2011) found retail investors prioritised economic information related to corporate investment plans, market share and customer satisfaction above ethical guidelines and environmental programs. With specific reference to Taiwan, Chang and Wei (2011) suggested that retail investors value corporate governance mechanisms such as the presence of independent directors.…”

Section: Investors' Use Of Non-financial Disclosuresmentioning

confidence: 99%

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Investment considerations and impressions of integrated reporting

Hsiao

Kelly

2018

SAMPJ

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Purpose Integrated reporting (IR) aims to improve the quality of information available to capital providers. While IR is associated with decreases in investor uncertainty and increases in firm value, it is unclear how IR information directly influences investment decisions. This paper aims to investigate the investment considerations of Taiwanese investors and their initial impressions of the International Integrated Reporting Framework (IIRC Framework). In doing so, this study examines the relationships between investment considerations and the IIRC Framework’s concepts. Design/methodology/approach Semi-structured interviews were undertaken with 16 investors in Taiwan. Thematic analysis was used to analyse the data collected. Findings In addition to economic and financial outlook, competitive advantages and ownership structure, Taiwanese investors emphasise management credibility as an important factor that influences investment decisions. Investors are reliant on private information sources and quantitative data. Sustainability disclosures and sustainability performance beyond legal requirements are often not considered. Taiwanese investors lack awareness of the IIRC Framework and are sceptical about the premise that integrated reports can provide information material to investment appraisal. The assertion that integrated reports reduce information asymmetry and influence investment decisions has to be treated with caution. Research limitations/implications Self-selection bias and a potential lack of transferability in the findings are issues inherent in the research method and sample used. Practical implications IR information needs to be frequently updated rather than disclosed in a periodic report. Furthermore, integrated reports need to demonstrate a direct link between non-financial performance and financial value creation. Social implications Mandating the supply of integrated reports is unlikely to influence investors’ capital allocation decisions unless investor demand is a driver of the regulation. Originality/value This study is one of the few to investigate IR from the investor’s perspective. Observations from this preliminary study warrant further investigations into the relevance of IR to investment communities globally.

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Section: Impressions Of Integrated Reportingsupporting

confidence: 70%

Section: Investors' Use Of Non-financial Disclosuresmentioning

confidence: 99%

Investment considerations and impressions of integrated reporting

Hsiao

Kelly

2018

SAMPJ

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“…This paper's contribution for practice is that it suggests that family business researchers, practitioners, and policymakers take family ownership into consideration when investigating dividend payout policy of family firms in a Confucian-influenced country since controlling family ownership may positively or negatively relate to dividend payout at different levels of family ownership concentration. Similar to Chang and Wei (2011), we argue that individual investors should incorporate corporate dividend policy to make their investment decision on the securities of family firms in Taiwan.…”

Section: Contributionsmentioning

confidence: 80%

Corporate governance in Taiwan: The nonmonotonic relationship between family ownership and dividend policy

2012

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This study considers an important aspect of corporate governance: the relationship between cash flow rights and dividend payout policy of listed family firms in Taiwan, an economy characterized by a predominance of family-controlled firms. Dividend payout levels are important because they are crucial to governing the firm and managing its investments. The empirical results show that at a low level of controlling families' cash flow rights, the threat to lose control at any time makes controlling families claim more in dividends. This yields a positive relationship between dividend payout and the cash flow rights of controlling families at this level. Meanwhile, at a moderate level of controlling families' cash flow rights, the entrenchment effect becomes more robust and creates a negative relationship with dividend payout. Finally, at the very highest level of controlling families' cash flow rights, excessive firm-specific risk again helps to again create a positive relationship. This nonmonotonic relationship between controlling family cash flow rights and dividend payout also holds for financially mature firms that have a high earned to contributed capital mix.

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“…Specifically, they employ an innovative experimental technique to identify whether Taiwanese investors will pay more for stocks of companies that are ostensibly better governed than their rivals. Chang and Wei (2011) show that governance strength can enhance the price that individual investors are willing to pay for stocks. However, the association between governance strength and the willingness to pay more for a stock is moderated by the investment experience of individuals.…”

Section: Conclusion and Future Researchmentioning

confidence: 99%