The Impact of Board Government on Investment Decision and Performance: Considering the Effect of Prior Performance and Self-Selection Bias

• Main Authors: Chun-Kai Lien, 連俊凱
• Other Authors: Jen-Jen Tseng
• Format: Others
• Language: zh-TW
• Published: 2012
• Online Access: http://ndltd.ncl.edu.tw/handle/98948906579470933414

碩士 === 清雲科技大學 === 財務金融所 === 100 === This study aims to explore the effect of performance feedback on investment decision under board government. A firm’s investment decision is not made at a random, but is mangers to self-select into their preferred strategies. In other words, there is a potential of self-selection bias in investment decision. If the self-selection bias is not taken into account then any conclusions drawn may be invalid. Hence, this study controls self-selection bias via Heckman’s two-stage decision model. The first stage, this study utilizes a Probit model to examine a firm’s board government how to influence its investment decision for 1914 samples of publicly traded electronics industry. And the inverse Mills ratio that corrects for self-selection matters in the second stage OLS regression. The empirical results of the first stage, this study found that there is a negatively relationship between the CEO duality, board size and directors'' ownership and increase investment when performance below their goals. The second stage, this study found that there is a positive relationship between firm’s investment and performance when the self-selection bias has been controlled.