Financial Liberalization, Foreign Ownership and Corporate Operational Efficiency: The Case of Taiwan Market
AbstractUsing a non-parametric data envelopment analysis (DEA) method, this paper investigates the investment allocation choices of foreign investors and how the foreign ownership and corporate operational efficiency play roles in Taiwan market with more financial liberalization. Empirical results suggest a possible channel. Through this channel, a high level of foreign ownership significantly positively affects corporate operational efficiency, and then higher operational efficiency triggers better performance. With more liberalization, some foreign investors are not only speculators, but also they play the role of monitoring or disciplinary. They improve corporate operational efficiency and performance, and thus in turn their investment profits, especially high-tech and exporting companies. These two roles are not mutually exclusive. The case of Taiwan market may have established a paradigm for developing countries to follow.
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Bibliographic InfoArticle provided by Better Advances Press, Canada in its journal Review of Economics & Finance.
Volume (Year): 3 (2013)
Issue (Month): (August)
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Find related papers by JEL classification:
- G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
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