| Summary: | 碩士 === 國立彰化師範大學 === 會計學系 === 102 === In recent years, with the continuous economic development, more and more enterprises go public to achieve the purpose of raising funds. Investors probably misevaluating the prices of IPOs results from high degree of information asymmetry in the initial period of IPOs. More than half of Taiwanese listed companies have concentrated ownership structures that are often controlled by families. When the agency conflict exists between minority shareholders and the controlling owner, controlling owner could exploit the interests of minority shareholders. Moreover, with the raising awareness of corporate governance and investor protection, directors and officers confront the higher liability risk. Therefore, the demand for purchasing Directors’ and Officers’ Liability Insurance (D&;O insurance) has become increased.
This paper examines the association between ownership structure and prices of IPOs, then examine the moderating effects of D&;O insurance. The empirical results reveal that when the agency conflict between minority shareholders and the controlling owner become worse, controlling owner has incentive to overprice by manipulating the financial report, then lead to a higher offer price and better aftermarket performance. However, more and more information about IPOs disclosure in the market, investors have more ability to evaluate the price of IPOs. Therefore, the worse the corporate governance is, the lower long-term performance. The paper also finds that controlling owner having D&;O insurance is more likely to act opportunistically under the protection of D&;O insurance. Therefore, if companies purchase D&;O insurance, the agency conflict between minority shareholders and the controlling owner would get aggravated.
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