The Moderating Effects of Corporate Governance on the Relation between Investment in China and Firm Performance

• Main Authors: Ming-yi Lin, 林銘益
• Other Authors: 歐進士
• Format: Others
• Language: en_US
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/87644358529948032618

碩士 === 國立中正大學 === 會計與資訊科技研究所 === 97 === China has become a new economic market which is competitively invested from the world, since it followed the open economic policies and the trade liberalization after joining WTO (World Trade Organization). Due to rich resources, cheaper labors and the same language and culture, China has become the major location of foreign direct investment for Taiwanese company. Most previous studies focused on firm performance of investment in China. A variety of determinant factors impacts the investment performance. In this study, we will analyze whether corporate governance mechanism can efficiently monitor foreign direct investment such as investment in China. We employ four governance variables (independent director, institutional investors, ownership, and creditor) to examine the moderating effects on the relationship between investment in China and firm performance. The results from a sample of the electronic industry in Taiwan in the 2004-2007 sampling period show that the four governance factors significantly influence firm performance. However, when we consider investment in China in our model, not all governance variables can improve firm’s accounting profit rate by moderating investment – performance relationship.