A Study of the Relationship among Foreign Ownership Ratio and Corporate Financial Performance of Electronic Companies

• Main Authors: Yeou-Shinn Hwang, 黃友信
• Other Authors: Tasi-Lien Yeh
• Format: Others
• Language: en_US
• Published: 2014
• Online Access: http://ndltd.ncl.edu.tw/handle/34987351663377388797

碩士 === 銘傳大學 === 財務金融學系碩士在職專班 === 102 === With Taiwan listed electronic companies as the research objectives, this study explores the internal corporate governance structure- ownership structure, such as share proportions of the largest shareholder, administrator as well as directors and supervisors, and also the composition of the board, such as board size, the number of independent directors, and also analyzes the external corporate governance controls such as share proportions of foreign investors, so as to learn the relationship between the corporate performance with internal and external corporate governances. It also further explores whether the share proportion by foreign investors will be affected by the corporate governance variables reversely. The empirical results of Model 1 show:(1) share proportion of the largest shareholder only show positive correlation with ROE, up to significance level of 5%, and its correlation with EPS and ROA doesn’t achieve the level, indicating that hypothesis 1 in the study is established. (2) Share proportion of the administrators has positive correlation with the cooperator performance, showing that the higher proportion of administrators brings better corporate performance,which meets the study expectations, thus the research hypothesis 2 is established. (3) There are positive correlations between share proportion of directors and supervisors and ROA/ROE, which ups to significance level, but its correlation with EPS does not reach the significant level, namely, the results meet the study expectations, thus the research hypothesis 3 is established. (4) The board size is not significantly correlated with business operating performance, which fails to meet the study expectations, thus the research hypothesis 4 is not founded.(5) The independent directors and supervisors seats have no significant correlation with corporate performance, probably because some companies have no the independent directors and supervisors seats, resulting in samples unable to attain the significant level, which is not consistent with the study expectation, making the research hypothesis 5 not be founded. (6) There is a positive correlation between share proportion by foreign investors and corporate performance to a significant level, showing that higher share proportion by foreign investors positively impacts on the corporate performance significantly. This suggests that foreign investment in the corporate equity shall be based on in-depth research of its business performance, which meets the study expectations, thus the research hypothesis 6 is established. In addition, Model 2 shows: the proportion of the largest shareholder, board size, independent directors and supervisors seats and EPS are all positively correlated with share proportion by foreign investors, which is up to significance level of 5%.1%. These indicate that the foreign investors may increase their share proportion because of the enhanced share proportion of the largest shareholder, the increase of board members, the increase of independent director and supervisor seats and the raised EPS. There is a negative correlation between share proportion of administrators and that of the directors and supervisors to a significant level of 5%, probably because the increased share proportion of administrators may result in serious duality concern and even negative impact. Also the correlation between the increased share proportions by foreign investors with ROA.ROE is not significant, indicating foreign investors attach greater focus on the EPS rather than ROA.ROE of the companies.