Does Ownership Structure Affect Firm Value in Taiwan? A Panel Threshold Regression Analysis

• Main Authors: Feng-Li Lin, 林鳳麗
• Other Authors: Tsang-Yao Chang
• Format: Others
• Language: en_US
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/77323563030593976013

博士 === 逢甲大學 === 商學研究所 === 97 === This study analyzes whether managerial ownership, ownership concentration, family ownership and institutional ownership respectively, affects firm value and does so using a panel of 266 Taiwanese listed companies during the eleven-year 1996-2006 period. I employ an advanced panel threshold regression model to test whether there is a “threshold” managerial ownership, ownership concentration, family ownership and institutional ownership respectively, which causes there to be asymmetrical relationships between managerial ownership, ownership concentration, family ownership and institutional ownership and firm value, respectively. This study finds that there are two threshold effects between managerial ownership and firm value, which are 5.01% and 11.47%. The effect of managerial ownership is strongest in the low ownership regime and weakest in the high ownership regime, lending strong support to alignment effects. The negative entrenchment effect is dominant when ownership concentration less than 12.32% or greater than12.61%, while the 12.32% to 12.61% ownership concentration level reflects the positive incentive effect. There must be a threshold family ownership between 31.76% and 33.61% because it is at this level when firm value is increased maximize. There must be a threshold institutional ownership greater than 81.2% at which point the firm’s value will start to increase. These results are consistent with the positive alignment effective and monitoring effective hypotheses.