The Relationship between Corporate Governance and Return on Investment -TWSE/GTSM Listed Companies

• Main Authors: Zigh Ting Lo, 羅芷庭
• Other Authors: Chun-Ju Liu
• Format: Others
• Language: zh-TW
• Published: 2017
• Online Access: http://ndltd.ncl.edu.tw/handle/8f4x7h

碩士 === 東海大學 === 會計學系 === 105 === This study explored the association between corporate governance and return on investment to find out if more comprehensive corporate governance can increase the investment value. To do so, the present study chose two critical aspects of corporate governance, board characteristics and ownership structure, and examined their impact on company stock performance. The research subjects were Taiwan Stock Exchange (TWSE)/Gre Tai Securities Market (GTSM) listed companies between 2006 and 2014, and the collected data were examined by the least-square regression analysis. The findings are as follows: (1) Ownership concentration, debt ratios, and the 2008-2009 financial tsunami were found to have a positive and significant impact on the rate of annual return of all the sampled companies in this study, but at the same time, they acted negatively and significantly on the percentage of board seats held by independent directors. (2) Debt ratios were found to have a negative and significant impact on the price-to-earnings ratio, suggesting that the higher the debt ratio the lower the price-book ratio. (3) The percentage of board seats held by outside directors, percentage of shares held by legal entities and ownership concentration were found to exert a positive and significant impact on the price-book ratio of all the sampled companies in this study. On the other hand, the percentage of board seats held by independent directors, percentage of pledged shares held by company directors and supervisors, percentage of shares held by the directors and supervisors, cash flow rights, debt ratios, 2008-2009 financial tsunami, and company size (large- and medium-scale) were found to exert a negative and significant impact on the price-book ratio of all the sampled companies in this study. These results reveal a stock oversold condition during the financial tsunami, and moreover, the magnitude of the decline in stock prices exceeded in the net value. (4) The percentage of board seats held by outside directors, percentage of shares held by legal entities, and 2008-2009 financial tsunami were found to have a positive and significant effect on the dividend yield but a negative and significant effect on the percentage of pledged shares held by company directors and supervisors, meaning that because of the underestimation of stock prices during the financial tsunami, investors expected an above-average dividend yield.