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Board Ownership and Firm Value in Taiwan - A Panel Smooth Transition Regression Model

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  • Feng-Li Lin

    (Department of Accounting, Chaoyang University of Technology, Taichung, Taiwan, No. 168 Jifong E. Rd., Wufong Township Taichung County, 41349, Taiwan, R.O.C.)

Abstract

Using a panel of 504 Taiwanese listed firms during a 10-year period (2002-2011), this study tests whether there is an optimal level of board ownership, which maximizes firm value. This work adopts Tobin’s Q as the proxy for firm value and finds that board ownership between 11.57% and 14.35% are an optimal level of board ownership to maximize firm value. This shift in financing sources propels the nonlinear relationship uncovered in this study and sheds light on Taiwan’s legal system of ownership structure.

Suggested Citation

  • Feng-Li Lin, 2013. "Board Ownership and Firm Value in Taiwan - A Panel Smooth Transition Regression Model," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 148-160, December.
    • Handle: RePEc:rjr:romjef:v::y:2013:i:4:p:148-160
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    References listed on IDEAS

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    Cited by:

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    2. Manhwa Wu & Paoyu Huang & Yensen Ni, 2020. "The Impact of Institutional Shareholdings on Price Limits," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 27(3), pages 343-361, September.

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    More about this item

    Keywords

    firm value; Tobin’s Q; board ownership; board of directors; entrenchment; panel smooth transition regression;
    All these keywords.

    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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