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The Relationship between Corporate Governance and Firm Productivity: evidence from Taiwan's manufacturing firms

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  • Min-Hsien Chiang
  • Jia-Hui Lin

Abstract

This study analyses the relationship between ownership structure and board of director composition and their influences on the total factor productivity (TFP) of Taiwan's firms. The empirical results show that the curvilinear specification is better to capture the relationship between inside ownership and firm productivity. Meanwhile, the ownership structure in a firm indeed affects differences in TFP between conglomerate firms and non-conglomerate firms, high-tech firms and non-high-tech firms, and family-owned firms and non-family-owned firms. Additionally, a smaller board may be less encumbered by bureaucratic problems and more functional and CEO duality may be able to improve productivity. Furthermore, productivity deteriorates with increasing proportion of collateralised shares. More institutional holdings, however, are an effective way to alleviate the negative impact of collateralised shares on TFP. Copyright (c) 2007 The Authors; Journal compilation (c) 2007 Blackwell Publishing Ltd.

Suggested Citation

  • Min-Hsien Chiang & Jia-Hui Lin, 2007. "The Relationship between Corporate Governance and Firm Productivity: evidence from Taiwan's manufacturing firms," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(5), pages 768-779, September.
  • Handle: RePEc:bla:corgov:v:15:y:2007:i:5:p:768-779
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    Citations

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    Cited by:

    1. Chung-Hua Shen & Kun-Li Lin, 2010. "The Impact of Corporate Governance on the Relationship Between Fundamental Information Analysis and Stock Returns," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 46(5), pages 90-105, September.
    2. Elsayed, Khaled & Wahba, Hayam, 2013. "Reinvestigating the relationship between ownership structure and inventory management: A corporate governanceperspective," International Journal of Production Economics, Elsevier, vol. 143(1), pages 207-218.
    3. Huang, Paoyu & Ni, Yensen, 2017. "Board structure and stock price informativeness in terms of moving average rules," The Quarterly Review of Economics and Finance, Elsevier, vol. 63(C), pages 161-169.
    4. repec:hit:hitjcm:v:56:y:2015:i:1:p:93-115 is not listed on IDEAS
    5. Dai, Yunhao & Kong, Dongmin & Xu, Jin, 2017. "Does fairness breed efficiency? Pay gap and firm productivity in China," International Review of Economics & Finance, Elsevier, vol. 48(C), pages 406-422.
    6. Kweh, Qian Long & Kuo, Kuo-Cheng & Wang, Wei-Kang & Liu, Hsian-Ming, 2015. "Board Independence, Family Control, And Performance In Taiwanese Listed Semiconductor Companies," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 56(1), pages 93-115, June.
    7. Cucculelli, Marco & Marchionne, Francesco, 2012. "Market opportunities and owner identity: Are family firms different?," Journal of Corporate Finance, Elsevier, vol. 18(3), pages 476-495.
    8. Chung-Hua Shen & Kun-Li Lin, 2010. "The Impact of Corporate Governance on the Relationship Between Fundamental Information Analysis and Stock Returns," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 46(5), pages 90-105, September.
    9. Lu, Wen-Min & Wang, Wei-Kang & Hung, Shiu-Wan & Lu, En-Tzu, 2012. "The effects of corporate governance on airline performance: Production and marketing efficiency perspectives," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(2), pages 529-544.
    10. Isabel-María García-Sánchez, 2010. "The effectiveness of corporate governance: board structure and business technical efficiency in Spain," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 18(3), pages 311-339, September.

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