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The Relationship between Corporate Governance and Firm Productivity: evidence from Taiwan's manufacturing firms

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  • Min‐Hsien Chiang
  • Jia‐Hui Lin

Abstract

This study analyses the relationship between ownership structure and board of director composition and their influences on the total factor productivity (TFP) of Taiwan's firms. The empirical results show that the curvilinear specification is better to capture the relationship between inside ownership and firm productivity. Meanwhile, the ownership structure in a firm indeed affects differences in TFP between conglomerate firms and non‐conglomerate firms, high‐tech firms and non‐high‐tech firms, and family‐owned firms and non‐family‐owned firms. Additionally, a smaller board may be less encumbered by bureaucratic problems and more functional and CEO duality may be able to improve productivity. Furthermore, productivity deteriorates with increasing proportion of collateralised shares. More institutional holdings, however, are an effective way to alleviate the negative impact of collateralised shares on TFP.

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  • Min‐Hsien Chiang & Jia‐Hui Lin, 2007. "The Relationship between Corporate Governance and Firm Productivity: evidence from Taiwan's manufacturing firms," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(5), pages 768-779, September.
    • Handle: RePEc:bla:corgov:v:15:y:2007:i:5:p:768-779
    DOI: 10.1111/j.1467-8683.2007.00605.x
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    References listed on IDEAS

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    1. Jiann-Chyuan Wang & Kuen-Hung Tsai, 2003. "Productivity Growth and R&D Expenditure in Taiwan's Manufacturing Firms," NBER Working Papers 9724, National Bureau of Economic Research, Inc.
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