| Summary: | 碩士 === 中原大學 === 企業管理研究所 === 101 === In order to facilitate liberalization and internationalization of Taiwanese securities market, the stock market in Taiwan has been open to foreign investments since 1991. For the past decade, the holdings of foreign investments in Taiwanese stock market rose dramatically from 15.3% in 2002 to 30.3% in 2012, and the total number of transactions of foreign investments was about 80% of the three institutional investors. Accompanying the increase of foreign ownership, more and more foreigners are on the board of directors of local companies. This study examines the impact of (i) the percentage of foreign ownerships to total outstanding shares; (ii) the percentage of foreign directors to total directors; (iii) the percentage of independent directors to total directors; and (iv) the percentage of foreign independent directors to total directors on corporate performance. This study examines all these aspects using the fixed-effect models for our panel data, with sampling periods reflecting the policy changes in Taiwan in 2002 and 2007.
Empirical findings are listed below:
1. The percentage of foreign ownership to total outstanding shares has significantly positive correlation with the rate of return on assets (ROA) of the companies. However, the percentage of foreign ownership to total outstanding shares does not have significant correlation with the return on equity (ROE).
2. The percentage of foreign independent directors to total directors of the companies do not have direct impact on corporate performance; but if coupled with board size restrictions, this study finds that the percentage of foreign independent directors to total directors has significantly negative correlation with corporate performance as the size of the Board of Directors increases.
3. The percentage of foreign directors to total directors has significantly negative correlation with corporate performance for the small sample size from 2002 to 2006.
4. The percentage of independent directors to total directors does not have any significant correlation with the ROA of the companies. However, this percentage is negatively correlated with the ROE of the companies.
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