Politically Connected Boards and the Structure of CEO Compensation Packages in Taiwanese Firms

Yu, Hsin-Yi

doi:10.2139/ssrn.1346275

Cited by 1 publication

(2 citation statements)

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“…In China, such behaviour is reflected in the enterprises irrationally and blindly following the CBMA trend, especially after 2008. Yu () noted that increasing the number of independent members on the board of directors rationalises an enterprise's decision‐making process and, thus, reduces the blindness of M&As. In this study, we used the ratio of the number of independent directors to total directors (OUTSIDE) to measure the rationality of the investment process.…”

Section: Sample and Methodsmentioning

confidence: 99%

“…Existing research also suggests that the size (Fan et al, ; Chen and Young ; Yu, ; Gu and Reed, ; Zhang, ) and value (Chan et al., ; Fama and French, , ) of the acquirer may also affect its M&A performance. We used the natural logarithm of total assets (LNASSET) to measure the acquirer's size and the price‐to‐earnings ratio (PE) and price‐to‐book ratio (PB) to measure the value of the acquirer.…”

Section: Sample and Methodsmentioning

confidence: 99%

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Political Connections, Government Intervention and Acquirer Performance in Cross‐border Mergers and Acquisitions: an Empirical Analysis Based on Chinese Acquirers

Yang

Zhang

2014

World Economy

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The extant literature suggests that the political connections enjoyed by Chinese acquiring firms have both positive and negative effects on their performance in cross‐border mergers and acquisitions (CBMA). We employed firm‐level data on Chinese acquirers from 2001 to 2012, demonstrating that the effect of political connections on mergers and acquisitions performance is determined by external government intervention. Holding the level of political connections constant, the greater the degree of government intervention is, the worse the acquirer's performance in cross‐border mergers and acquisitions will be. We also demonstrated that political connections affect acquirer performance in cross‐border mergers and acquisitions through the channel of preferential access to bank financing, and the acquiring firms' high cash holdings, which are encouraged by the ease of bank financing, have a negative effect on acquirer CBMA performance. Using the Blinder‐Oaxaca decomposition, we investigated changes in the Chinese acquirers' performance following changes in the external policy environment in 2008 and the effect of political connections and other factors on this change.

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Section: Sample and Methodsmentioning

confidence: 99%