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The Year-End Anomaly of Taiwanese Family-Controlled Groupings

Author

Listed:
  • Yin-Hua Yeh

    (Department of International Trade and Finance, Fu-Jen Catholic University, 242, Hsin-Chuang, Taipei, Taiwan, R.O.C.)

  • Pei-Gi Shu

    (Department of Business Administration, Fu-Jen Catholic University, 242, Hsin-Chuang, Taipei, Taiwan, R.O.C.)

  • Wen-Yi Huang

    (Graduate Institute of Finance, Fu-Jen Catholic University, 242, Hsin-Chuang, Taipei, Taiwan, R.O.C.)

Abstract

The average abnormal return of Taiwanese family-controlled grouping (1.60 percent) is significantly higher than that of individually listed companies (0.03 percent) in December. Within the same family-controlled grouping, the average abnormal return in December is also higher than that of the rest of the months (-0.13 percent) in the sampling periods 1992 through 1997. We cautiously set five joint criteria to define the anomaly in December that pertains only to the family-controlled grouping. The empirical results supported our argument by which the ornamenting motive of the family-controlled grouping is to account for the anomaly. For illustration, we further identify company size, losses from currency translation and bad debt, cash flow, and the gain from selling long-term investment which can effectively contrast the willingness and capability of family-controlled grouping to engage in the year-end earning management.

Suggested Citation

  • Yin-Hua Yeh & Pei-Gi Shu & Wen-Yi Huang, 2001. "The Year-End Anomaly of Taiwanese Family-Controlled Groupings," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 4(02), pages 127-163.
    • Handle: RePEc:wsi:rpbfmp:v:04:y:2001:i:02:n:s0219091501000371
    DOI: 10.1142/S0219091501000371
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    Citations

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    Cited by:

    1. Chih-Yang Tseng, 2020. "Family firms and long-term orientation of SG&A expenditures," Review of Quantitative Finance and Accounting, Springer, vol. 55(4), pages 1181-1206, November.

    More about this item

    Keywords

    Anomaly; Earning management; Family control; Family-controlled grouping;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • G3 - Financial Economics - - Corporate Finance and Governance

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