The Design of an Optimal Corporate Governance System in Taiwan

An-Lin Chen ； Che-Hao Hsiao ； Lan-Feng Kao ； Cheng-Shou Lu

《Advances in Financial Planning and Forecasting》 4期 (2011/03) Pp. 77-97

https://doi.org/10.6292/AFPF.2011.04.04

並列摘要

The corporate governance mechanisms to alleviate agency costs arise from three primary forces: (1) aligning the manager's incentives with that of shareholders; (2) monitored debts; and (3) takeover market. In this paper, we examine the performance of Taiwan firms under various combinations of the corporate governance mechanisms to find out the design of an optimal corporate governance system in Taiwan. We find that Taiwan firms tend to align insiders' interests with that of minority shareholders to reinforce governance and that monitoring bank does not play its role in governance. Firms with insider alignment or under stronger takeover threat experience better performance, while firms under governance of bank monitoring experience worse performance. The alignment-based corporate governance system seems to be optimal in Taiwan economic environments.

並列關鍵字

Corporate governance ； Inside ownership ； Monitored debt ； Taiwan ； Takeover market

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