An Empirical Study on Corporate Restructuring during Performance Declines

• Main Authors: Chung-Cheng Huang, 黃忠誠
• Other Authors: Ming-Yuan Chen
• Format: Others
• Language: zh-TW
• Published: 2000
• Online Access: http://ndltd.ncl.edu.tw/handle/82302182723068580599

碩士 === 淡江大學 === 產業經濟學系 === 88 === This paper documents the restructuring of 121 Taiwanese corporations that experienced a substantial decline in stock-return performance between 1993 and 1998. These firms implement a number of downsizing measures including asset contraction actions and employee layoffs, also perform expansion actions such as new facility construction, new production, and diversification. Firms often restructure their internal operations and change the internal control by replacing the president or top managers. I have found that the frequency of expansion actions is many times that of contraction actions among Taiwan’s firms during performance declines. According to empirical results, the frequency of asset downsizing and layoffs increases with the ownership by the firm’s managers, directors of the board, and external institutions. Institutions also decrease the likelihood of expansion and internal reorganization actions. Financial institutions and government agencies increase the probability of outside director additions and outside director removals, but financial and external corporate institutions decrease top management turnover. In addition, top management turnover is more significant in large firms.