Ultimate Controller Ownership and Firm Value in Taiwan

Lin, Feng-Li; Lin, Hai-Ling

doi:10.2753/ree1540-496x490104

Cited by 15 publications

(8 citation statements)

References 26 publications

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“…It is evident from various Asian countries that ownership divergence and firm's profitability are in nonlinear relationship with each other (Lin and Lin, 2013;Wiwattanakantang, 2001;Utama et al, 2017). The study of Hanafi et al (2018) also shows significant relationship between ownership and firm performance, especially the saturated ownership increases the performance.…”

Section: Overview Of Sugar Industrymentioning

confidence: 92%

The mediating role of board size, philanthropy and working capital management between basic corporate governance factors and firm's performance

Shahid

Abbas

Latif

et al. 2020

JABES

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PurposeThis study aims to identify the impact of corporate governance on performance of sugar mills. In order to study this relation, a model is constructed in which ownership structure and independent directors are taken as independent variables. Whereas firm performance is analyzed by using proxy variables such as return on asset (ROA), return on equity (ROE) and sales growth. Moreover, size of board, working capital management (WCM) and philanthropy are taken as mediating variables between governance variables and firm performance.Design/methodology/approachThe data of 32 sugar mills listed at Pakistan Stock Exchange for the period of four years (i.e. 2014–2017) is used for this research. Moreover, to investigate the model, generalized least squares statistical method is used to measure the relationship between variables.FindingsThe results revealed that there is significant but positive relationship between independent directors and ROA while ownership structure and ROE have significant but negative relationship. Thus, the board of directors should make it sure that all stakeholders and organizations should increase the nonfamily ownership in firms for better corporate performance. Moreover, philanthropy and WCM mediate the relationship between corporate governance and firms' performance.Practical/implicationsThis research work will be helpful in the corporate governance, and further researchers can conduct their study by considering executive/nonexecutive director and institutional owners as governance variables.Originality/valueThis paper fulfills an identified need to study how Corporate Governance effect the performance of firm.

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Section: Overview Of Sugar Industrymentioning

confidence: 92%

The mediating role of board size, philanthropy and working capital management between basic corporate governance factors and firm's performance

Shahid

Abbas

Latif

et al. 2020

JABES

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“…Our paper contributes to the existing literature by presenting more recent evidence of the impact of ownerships structure on firms' performance, and the dynamics of markets that make the effect changes with time. We also contribute to the existing literature by providing complementary evidence on the effect of governance and ownerships structure on firms' performance in the Asian context (Wiwattanakantang, 2001;Lin and Lin, 2013;Utama et al, 2017). To the best of our knowledge, there has been no study on emerging markets that compares the effect of ownerships structure on performance using the setting of different financial crises.…”

Section: Introductionmentioning

confidence: 92%

“…The evidence from country-specific studies, especially in the Asian context, can be found in Wiwattanakantang (2001) for Thailand, Lin and Lin (2013) for Taiwan and Utama et al (2017) for Indonesia. Wiwattanakantang (2001) and Lin and Lin (2013) report a non-linear effect of ownership on firms' performance.…”

Section: Corporate Governance Ownership Structure and Firm Performancementioning

confidence: 99%

Ownership structure and firm performance: evidence from the subprime crisis period

Hanafi

Setiyono

Sanjaya

2018

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Purpose This paper aims to compare the effect of ownership on firm performances in the 1997 and 2008 financial crises. More specifically, it investigates the effect of cash flow rights, control rights and cash flow rights leverage on firm performance. Two conditions motivated the study. First, the 2008 financial crisis happened quickly, so it was endogenous for firms. This setting is ideal to deal with endogeneity problems in a study that involves ownership and performance. Second, during the 2000s, awareness and implementation of corporate governance increased significantly. The authors believe that the markets learn these changes and incorporate them into prices, as suggested by an efficient market hypothesis. Design/methodology/approach The paper investigates and compares the effect of ownership structure on firm performance in the 2008 subprime crisis period to that in the 1997 financial crisis. Both crises happen unexpectedly, so the authors can expect that the crises are exogenous to firms. The authors use cash flow rights, control rights and cash flow right leverage for the ownership structure dimension. They also study time-series data to investigate the effect of ownership on a firm’s value. Findings The study finds that cash flow right and cash flow right leverage did not affect stock performance during the subprime crisis of 2008. It also finds that cash flow right leverage and cash flow right affected stock performance during the financial crisis of 1997. The study attributes this finding to the learning process and improvement of corporate governance during the period of the 2000s. Using time-series data, it finds that cash flow rights positively affect firm performance, suggesting an alignment effect. Ownership concentration improves firm performance. When the study split its sample, it found that the effect ownership on firms’ value is stronger for large firms. Research limitations/implications The study’s main limitation is that it does not test directly the learning process hypothesis. The study contributes to the current literature by presenting more recent evidence on the effect of ownership structure on firm performance in a developing country. The authors argue that markets learn the improvement of corporate governance and incorporate this development into prices. Extending this research to other markets will provide confirmation whether the learning process is an international phenomenon. Practical implications The awareness and implementation of corporate governance should be maintained at least at this level. The positive relationship between ownership concentration and firm performance suggests that concentrated ownership performs monitoring more effectively. Investors should pay attention to ownership concentration. Social implications The finding that prices already reflect corporate governance may suggest that market is monitoring this issue. This seems to be a good finding. Markets can be expected to discipline companies in the implementation of corporate governance. The awareness and implementation of corporate governance should be maintained at least at the current level. Originality/value The study contributes to the current literature by presenting additional evidence on the effect of ownership (using cash flow rights, control rights and cash flow right leverage) on firms’ performance in a more recent period and in a developing country. This period is characterized by a significant increase in awareness and the implementation of good corporate governance.

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“…Obszerną grupę badań stanowią analizy dotyczące wpływu struktury akcjonariatu na efektywność funkcjonowania spółek (Thomsen, Pedersen 2000;Varcholova, Beslerova 2013;Zatora, Maryniak 2013) 6 . Wyniki prowadzonych badań dowodzą, iż struktura akcjonariatu jest również determinantą struktury źródeł finansowania (Wilczyński 2015), wartości przedsiębiorstwa (Lin, Lin 2013), ryzyka upadłości (Poletti-Hughes, Ozkan 2014), płynności akcji i stopnia asymetrii informacji (Attig i in. 2006).…”

Section: Przegląd Badań Empirycznych Nad Strukturą Akcjonariatuunclassified

Zmiany w strukturze akcjonariatu polskich spółek giełdowych zmieniających rynek notowań akcji

Wawryszuk-Misztal

2016

Folia Oeconomica

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Celem artykułu jest ocena zmian w strukturze akcjonariatu 28 spółek migrujących z rynku NewConnect na rynek regulowany GPW w Warszawie. Przyjęta hipoteza badawcza zakłada, iż przejście z rynku NewConnect na rynek główny GPW prowadzi do zwiększenia udziału w kapitale zakładowym instytucji finansowych. W strukturze akcjonariatu badanych spółek zidentyfikowano trzy grupy inwestorów notyfikowanych: osoby fizyczne, instytucje finansowe oraz spółki. Wybrane zmienne opisujące strukturę akcjonariatu zostały obliczone dla okresu przed zmianą i po zmianie rynku notowań akcji. Wyniki nieparametrycznego testu Wilcoxona nie potwierdzają przyjętej hipotezy badawczej, ale pozwalają stwierdzić, iż zmiana rynku prowadzi do wzrostu udziału free float i zmniejszenia koncentracji własności.

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Ultimate Controller Ownership and Firm Value in Taiwan

Cited by 15 publications

References 26 publications

The mediating role of board size, philanthropy and working capital management between basic corporate governance factors and firm's performance

The mediating role of board size, philanthropy and working capital management between basic corporate governance factors and firm's performance

Ownership structure and firm performance: evidence from the subprime crisis period

Zmiany w strukturze akcjonariatu polskich spółek giełdowych zmieniających rynek notowań akcji

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