The Empirical Analysis of Relationship between Composition of Board of Directors, Ownership Structure, the Related Party Transaction and Firm Performance-Evidence in Textile Industry and Electronics Industry Listed on TSE

• Main Authors: Li-Chuan Chen, 陳麗娟
• Other Authors: Ming-Tien Tsai
• Format: Others
• Language: zh-TW
• Published: 2004
• Online Access: http://ndltd.ncl.edu.tw/handle/vbea3e

碩士 === 國立成功大學 === 高階管理碩士在職專班 === 92 === 　　Recently, there are many financial crises around the world. The main reason is the system of corporate governance is not healthy enough. This study discusses the relationship between firm performance and the composition of board, the structure of ownership and the related party transaction. Our samples are 53 spinning companies and 170 electronic companies. The results are below: 1.In the part of the composition of board: the size of board has negative impact on firm performance. The percentage of outside directors has positive impact on performance in spinning industry, but negative in hi-tech and low-tech electronic industry. Hence, too many outside directors may lead to poor performance. The percentage of directors served by block holders has positive impact on performance in spinning industry; it implies that block holders are good monitors themselves. But the percentage of directors served by block holders has negative impact on performance in hi-tech and low-tech electronic industry; it implies that block holders also have the incentive to loot the assets of company. 2.In the part of the structure of ownership: About the percentage of ownership hold by managers, our result support Entrenchment Hypothesis. The percentage of ownership hold by directors and monitors has positive impact on performance, but the percentage of ownership hold by institution has negative impact on performance. The question whether block holders are good monitors seems depend on the morality of block holders. 3.In the part of the related party transaction: the percentage of purchase and sales about the related party has negative impact on performance. But the percentage of accounts payable and accounts receivable about the related party has positive impact on performance. Additionally, the shares as collateral by the board of directors have negative impact on performance.