Board composition, corporate ownership and market performance: evidence from Taiwan
This article examines the effects of ultimate controlling shareholders’ ownership and board involvement on market liquidity and volatility using data from the Taiwan's market. We find that when a firm's ultimate controlling shareholder holds more control rights and is more involved on the board, and when there is a larger divergence between ultimate control and ownership as well as a larger divergence between controlling shareholders’ cash-flow rights and their board representation, the governance function would be less effective, leading to lower stock liquidity and higher idiosyncratic volatility. We also find that firms controlled by business groups have poor performance of the two market metrics. Furthermore, outside independent directors do not have significant effects on market liquidity and volatility, probably due to too small representation on the board to have effective monitoring.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 22 (2012)
Issue (Month): 14 (July)
|Contact details of provider:|| Web page: http://www.tandfonline.com/RAFE20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RAFE20|
When requesting a correction, please mention this item's handle: RePEc:taf:apfiec:v:22:y:2012:i:14:p:1193-1206. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If references are entirely missing, you can add them using this form.