Applying Structure Equation Model to Confirm the Relationships among Firm Performance, Corporate Governance and Financial Structures

• Main Authors: Ya-Chun Wei, 魏雅君
• Other Authors: Hsin-Hue Chang
• Format: Others
• Language: zh-TW
• Published: 2007
• Online Access: http://ndltd.ncl.edu.tw/handle/8s5xdm

碩士 === 銘傳大學 === 財務金融學系碩士班 === 95 === The change of the global economic environment and business type results in the agency problem. In order to solve the agency problem, the enterprise will implement the corporate governance to improve the performance of the enterprise. The performance of the enterprise is also revealed by the financial statements of the enterprise. However, the finance ratios and performance lack of the consistency of the definition and the measurement criterion. Therefore, this study applies exploratory factor analysis to extract representative finance ratios, and apply second-order confirmatory factor analysis of structural equation model to confirm the relationship among firm performance, corporate governance and financial structures. Since most of the finance ratios exhibit non-normal distributions, this study applies bootstrapping method to increase sample size in order to acquire the convergence of the parameter solution. The empirical result of this study reveals that management ownership, institutional investor ownership, board ownership, and the ratio of outside independent director have significant positive relationship with firm performance. This empirical result also indicates that the profit ability, managerial ability, and liquidity ability have significant positive relationship with firm performance. In accordance with the independence of the board of directors, the empirical result indicates that the duality of the board chairman would not influence the independence of the board of directors, resulting in insignificant impact of the firm performance.