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An empirical study of equity agency costs and internationalization: Evidence from Taiwanese firms

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  • Chiang, Yi-Chein
  • Ko, Chun-Lein

Abstract

Under methodologies of the event study procedure and the multiple regression analysis, this study investigates equity agency costs and internationalization, using a Taiwanese sample from 2000 to 2004. The evidence shows that the shareholder wealth effects of security offering announcements are unfavorable for higher equity agency costs, especially unfavorable for higher equity agency costs of foreign-exposed multinational corporations (MNCs) because internationalization renders monitoring more difficult in comparison to domestic corporations (DCs). This study suggests MNCs to increase their information transparency in order to achieve lowered equity agency costs, and help to reduce information asymmetry, thereby enable firms to raise capital on the best available terms.

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  • Chiang, Yi-Chein & Ko, Chun-Lein, 2009. "An empirical study of equity agency costs and internationalization: Evidence from Taiwanese firms," Research in International Business and Finance, Elsevier, vol. 23(3), pages 369-382, September.
    • Handle: RePEc:eee:riibaf:v:23:y:2009:i:3:p:369-382
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    Cited by:

    1. 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.
    2. Aboud, Ahmed & Roberts, Clare, 2018. "Managers’ segment disclosure choices under IFRS 8: EU evidence," Accounting forum, Elsevier, vol. 42(4), pages 293-308.
    3. Thomas O'Connor, 2012. "Investability, Corporate Governance and Firm Value," Economics Department Working Paper Series n223-12.pdf, Department of Economics, National University of Ireland - Maynooth.

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