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Corporate Governance And Product Market Power: Evidence From Taiwan

Author

Listed:
  • Chong-Chuo Chang
  • Shieh-Liang Chen
  • Aini Farmania
  • Feng-Tse Tsai
  • Ping-Chao Wu

Abstract

The objective of this study is to investigate how a firm’s corporate governance affects its product market power. Adopting firms listed in the TSE and the OTC Exchange from 1996 to 2011, we find three main results. Firstly, better corporate governance leads to stronger product market power. Secondly, firms with higher research and development expenditure return on assets and market to book value have stronger market power while large and high leveraged firms are weak in product market power. Last but not least, cash holding plays an important role in deciding firms’ product market power. Companies with a high level of cash holding enjoy better product market power

Suggested Citation

  • Chong-Chuo Chang & Shieh-Liang Chen & Aini Farmania & Feng-Tse Tsai & Ping-Chao Wu, 2018. "Corporate Governance And Product Market Power: Evidence From Taiwan," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 12(1), pages 93-104.
    • Handle: RePEc:ibf:ijbfre:v:12:y:2018:i:1:p:93-104
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    References listed on IDEAS

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    More about this item

    Keywords

    Corporate Governance; Product Market Power; Agency Problems; Cash Holdings;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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