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An empirical study on the relationship between ownership and firm performance: Taiwan evidence

Author

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  • Yu-Chih Lin
  • Shaio Yan Huang
  • Shu-Chao Young

Abstract

This study is to investigate the relationship between ownership and firm performance in the environment in which collateralising shares by directors and supervisors is a common practice. The sample includes firms that are listed on the Taiwan Stock Exchange from 1998 to 2002 except those in the financial industry. We find that a significant positive relationship (alignment) exists between ownership and firm performance (measured by ROA and ROE) when the net ownership is high. However, when the net ownership is low, the negative relationship (entrenchment) between ownership and performance is not significant. Besides, there is a significant negative relationship between collateralised shares of directors and supervisors and performance.

Suggested Citation

  • Yu-Chih Lin & Shaio Yan Huang & Shu-Chao Young, 2008. "An empirical study on the relationship between ownership and firm performance: Taiwan evidence," Afro-Asian Journal of Finance and Accounting, Inderscience Enterprises Ltd, vol. 1(1), pages 67-80.
    • Handle: RePEc:ids:afasfa:v:1:y:2008:i:1:p:67-80
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    Citations

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    Cited by:

    1. Kun Tracy Wang & Greg Shailer, 2018. "Does Ownership Identity Matter? A Meta‐analysis of Research on Firm Financial Performance in Relation to Government versus Private Ownership," Abacus, Accounting Foundation, University of Sydney, vol. 54(1), pages 1-35, March.
    2. César Camisón & José Antonio Clemente & Sergio Camisón-Haba, 2022. "Asset tangibility, information asymmetries and intangibles as determinants of family firms leverage," Review of Managerial Science, Springer, vol. 16(7), pages 2047-2082, October.
    3. Wang, Kun Tracy & Shailer, Greg, 2017. "Family ownership and financial performance relations in emerging markets," International Review of Economics & Finance, Elsevier, vol. 51(C), pages 82-98.

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