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Measuring the Efficiency and the Effect of Corporate Governance on the Biotechnology and Medical Equipment Industries in Taiwan

Author

Listed:
  • Yen-Hsien Lee

    (Department of Finance, Chung Yuan Christian University,200 Chung Pei Road. Chung Li 32023, Taiwan)

  • Ya-Ling Huang

    (Department of Golden-Ager Industry Management,Taiwan)

  • Shiuh-Sheng Hsu

    (Graduate School of Management, Ming Chuan University,Taiwan)

  • Chien-Han Hung

    (Department of Banking and Finance, Tamkang University)

Abstract

This study adopts data envelopment analysis with Tobit regression analysis to measure the efficiency and investigate the influence of corporate governance on the efficiency of the biotechnology and medical equipment industries in Taiwan. The empirical results show that while inside equity influences the efficiency of profitability in the pharmaceutical industry, both inside and outside equity influence the efficiency of profitability in the medical equipment industry. Moreover, both inside and outside equity influence the efficiency of marketability in the pharmaceutical and medical equipment industry. The proportion of shares held by foreign institutions is significantly positively correlated with the efficiency of profitability and negatively correlated with the efficiency of marketability, implying that the short-term profit goal of the foreign institutional investors is to sell their holdings. Besides, the number of board members and transparency of information are significantly positively correlated with both the efficiency of profitability and the efficiency of marketability.

Suggested Citation

  • Yen-Hsien Lee & Ya-Ling Huang & Shiuh-Sheng Hsu & Chien-Han Hung, 2013. "Measuring the Efficiency and the Effect of Corporate Governance on the Biotechnology and Medical Equipment Industries in Taiwan," International Journal of Economics and Financial Issues, Econjournals, vol. 3(3), pages 662-672.
    • Handle: RePEc:eco:journ1:2013-03-9
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    References listed on IDEAS

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    Cited by:

    1. Stefan Cristian Gherghina, 2015. "Corporate Governance Ratings and Firm Value: Empirical Evidence from the Bucharest Stock Exchange," International Journal of Economics and Financial Issues, Econjournals, vol. 5(1), pages 97-110.
    2. Taufik Taufik & Tertiarto Wahyudi & Agung Putra Raneo & Mu'izzuddin Mu'izzuddin & Mohamad Adam, 2018. "Do Traditional Accounting and Economic Value Added Mediate The Relationship Between Corporate Governance and Firm Value of Indonesian State-Owned Enterprises ?," International Journal of Economics and Financial Issues, Econjournals, vol. 8(3), pages 118-126.
    3. Jamali, Hisnol & T, Sutrisno & Subekti, & Assih, Prihat, 2017. "The Influence of Corporate Governance and Corporate Social Responsibility on Financial Performancewith Efficiency as Mediating Variable," INA-Rxiv t796p, Center for Open Science.
    4. Mohammad Abu Sufian & Muslima Zahan, 2013. "Ownership Structure and Corporate Social Responsibility Disclosure in Bangladesh," International Journal of Economics and Financial Issues, Econjournals, vol. 3(4), pages 901-909.
    5. Ming-Feng Hsu & Shiow-Ying Wen, 2015. "The Roles of Institutional Investors and Insiders in Earnings Management around Initial Public Offering Firms in Taiwan," International Journal of Economics and Financial Issues, Econjournals, vol. 5(2), pages 340-353.
    6. Steven Buigut, 2015. "The Effect of Zimbabwe's Multi-Currency Arrangement on Bilateral Trade: Myth Versus Reality," International Journal of Economics and Financial Issues, Econjournals, vol. 5(3), pages 690-700.
    7. Mst. Maksuda Begum & Niluthpaul Sarker & Shamsun Nahar, 2023. "The Impact of Corporate Governance Attributes on Financial Distress among the Listed Firms in Pharmaceuticals Industry of Bangladesh," International Journal of Economics and Financial Issues, Econjournals, vol. 13(6), pages 155-167, November.

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    More about this item

    Keywords

    Data Envelopment Analysis; Biotechnology Industry; Corporate Governance; Transparency;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • P27 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Performance and Prospects

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