| Summary: | 博士 === 國立臺灣大學 === 會計學研究所 === 102 === In recent years, the government has continued to promote the reform of corporate governance through the implementation of various regulations and policies that enhance corporate governance standards. This is the public authority role for government to build and maintain a fair and competitive economic environment and allow market mechanisms to function soundly. On the other hand, the government is also a shareholder in investee enterprises. As a result of this dual role, the government can exercise more policy tools and resources than other investors. Therefore, the government should bear more responsibility in improving the corporate governance of investee enterprises. This study aims to examine (1) the relationship among government shareholdings, corporate governance, and firm performance, and (2) whether corporate governance could be an intermediary role in the relationship between government shareholdings and firm performance. That is, government could improve firm performance through the channel that the positive impact of government shareholdings on corporate governance, and further influence firm performance. We use government ownership, government-controlled seats in board of directors, and government as a major shareholder to proxy government shareholdings level in investee firms.
The empirical results show that the existence or the proportion of government-controlled seats in board of directors is positively related to corporate governance. The existence of government as a major shareholder in investee firm is positively related to corporate governance. And better-governed firms have higher operating performance and higher valuation in stock markets. Our results show that government ownership significantly impacts firm performance. The degree of impact on firm performance follows an inverted U-shape pattern, with performance increasing with the government ownership, up to an optimal level in turnover. Beyond that level, firm performance declined with increasing ownership. This result suggests that too much government ownership may lead to improperly control and interference in the operations of investee firms. Furthermore, we find that for firms under weaker governance, government shareholdings and corporate governance could play more powerful roles in elevating firm performance. Using Structural Equation Model (SEM), we verify the direct effect of government shareholdings on corporate governance and firm performance. We also observe the indirect effect of government shareholdings on firm performance through the channel that government shareholdings exercise influence on a firm’s corporate governance.
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