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The Impact of Corporate Governance on the Technical Efficiency of the IC Industry in Taiwan

Author

Listed:
  • Jwu-Rong Lin

    (Department of International Business, Tunghai University, Taiwan)

  • Hsiu-Ying Lee

    (Department of Accounting, Tunghai University, Taiwan)

  • Li-Peng Hsiao

    (Institute of Accounting, National Taipei University, Taiwan)

Abstract

The purpose of this paper is to analyze the impact of corporate governance on technical efficiency. We use the Translog stochastic production function to derive technical efficiency. Four empirical results are observed: (1) Technical efficiency has a negative relationship with the following two mechanisms: (a) the percentage of company shares owned by directors and supervisors and (b) the pledged shares ratio of directors, supervisors, and CEO duality. (2) The percentage of the company shares owned by managers makes a positive contribution to technical efficiency. (3) The percentage of the company shares owned by government has a negative relationship to technical efficiency. (4) In sum, insider ownership is unfavorable to the technical efficiency of the Taiwanese IC industry, but manager ownership is beneficial to the technical efficiency of the Taiwanese IC industry.

Suggested Citation

  • Jwu-Rong Lin & Hsiu-Ying Lee & Li-Peng Hsiao, 2009. "The Impact of Corporate Governance on the Technical Efficiency of the IC Industry in Taiwan," Journal of Economics and Management, College of Business, Feng Chia University, Taiwan, vol. 5(1), pages 29-54, January.
    • Handle: RePEc:jec:journl:v:5:y:2009:i:1:p:29-54
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    More about this item

    Keywords

    corporate governance; Translog stochastic frontier production function; technical efficiency;
    All these keywords.

    JEL classification:

    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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