Corporate Governance, Market Liquidity and Ownership Concentration: Evidence from Taiwan 50 Index Material Constituent

• Main Authors: Hsien-Te, Lan, 藍顯德
• Other Authors: Min-Li, Yao
• Format: Others
• Language: zh-TW
• Published: 2005
• Online Access: http://ndltd.ncl.edu.tw/handle/04307304850589959547

碩士 === 真理大學 === 財經研究所 === 93 === The main purpose of this paper is to examine the determinants of corporate governance in Taiwan 50 Index Material Constituent. First, this paper establishes a 56 items checklist based on Taiwan “Corporate Governance Best-practice Principles for Listed Companies” released on 2002. Then, the paper applies an equal-weighted method in calculating the score which it separates into three levels : the “Bad,” the “Fair,” and the “Good” and the three corporate governance levels are coded as 0, 1, and 2 respectively. Finally, an ordered probit model is used to analyze significance of possible factors affecting the corporate governance level. The paper empirically reveals that a company’s characteristics before the release might have significant influences on the probability of its choice on realizing corporate governance after the release. The result includes : (1) stock liquidity has a positive correlation with corporate governance level, (2) ownership concentration also has a positive correlation with corporate governance level, (3) investors’ information cost has a negative correlation with corporate governance level, (4) investors’ expected profit from future intervention has an uncertain effect on corporate governance level, and (5) the coefficient of board size in regression doesn’t significantly differ from zero. In the end, the paper suggests that Taiwan government should focus its prior attention on listed companies which have lower stock liquidity, lower ownership concentration, and higher information cost when promoting corporate governance in the future.