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Equity Agency Costs And Internationalization: The Effect Of Revised Accounting Standards In Taiwan

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  • Yi-Chein Chiang
  • Hsin-Chiu Huang

Abstract

This study investigates whether the equity agency problems of firms with foreign operations mitigate after 2005, when the revised accounting standards on consolidated financial statements were implemented in Taiwan. A sample of listed Taiwanese firms announcing security offerings from 2000 to 2008 were examined. The results weakly support the hypothesis that equity agency cost problems of Taiwanese multinational corporations improved after 2005. Thus, we suggest that the Taiwanese government further increase information transparency of multinational corporations in order to be consistent with International Accounting Standards and achieve lower equity agency costs.

Suggested Citation

  • Yi-Chein Chiang & Hsin-Chiu Huang, 2012. "Equity Agency Costs And Internationalization: The Effect Of Revised Accounting Standards In Taiwan," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 6(2), pages 101-111.
    • Handle: RePEc:ibf:ijbfre:v:6:y:2012:i:2:p:101-111
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    agency costs; consolidated financial statements; internationalization; information transparency;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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