The Study of Relationship between Takeover and Corporate Governance

• Main Authors: Chia-Hsiang Kang, 康家祥
• Other Authors: Roger C. Y. Chen
• Format: Others
• Language: zh-TW
• Published: 2003
• Online Access: http://ndltd.ncl.edu.tw/handle/26666544017417159993

碩士 === 國立高雄第一科技大學 === 財務管理所 === 91 === By using the samples of 55 listed companies in Taiwan Stock Exchange from 1991 to 2001, this study employs a binary logistic regression model to construct a prediction model to examine the relations between corporate governance and takeover act. The evidences show as follows. The possibility of being takeover target is negatively related to the shareholdings and size of the director board. When the chairman and CEO is the same person, the company has greater possibility to be taken-over. The deviation of controlling shareholders’ voting rights from their cash flow rights and the existence of the pyramids and cross-holdings are all positively related to the possibility of being takeover target. However, the size of company has significant negative relationship with takeover probability. This prediction model containing corporate governance features has correctly classified 81.82% of the sample firms. This paper confirms the findings of Jensen (1993) and other studies. That is, when corporate governance performance is worsening, the company value is decreased, which induces the market mechanism of takeover.