EconPapers    
Economics at your fingertips  
 

The Effect of Director's Individual and Family Shareholdings on Firm Performance

Tsung-Che Wu and Ming-hsiang Huang

International Journal of Financial Research, 2018, vol. 9, issue 4, 51-62

Abstract: The relation between firm performance and shareholding is a critical issue in corporate governance. In this paper, we examine if significant associations exist between firm performance and (1) directors¡¯ shareholdings or (2) directors¡¯ family shareholdings among Taiwanese listed firms. After addressing for possible endogeneity and controlling for firm specific variables, we find a positive association between executive director¡¯s shareholding and firm performance. Consistent with incentive effect in agency theory, this result indicates that executive directors have incentive to maximize firms¡¯ value. Also, we find that executive directors¡¯ family shareholding is positively related to firm performance, which implies that executive directors may be motivated by their family members to improve firm value. The results also imply that the majority-minority agency problem can be mitigated when director¡¯s family welfare is at stake. In addition, we divide research sample into subsets to accommodate the effect of mandatory independent director regulation in Taiwan since 2007.

Keywords: directors? shareholding; directors? family shareholding; endogeneity (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciedu.ca/journal/index.php/ijfr/article/view/14021/8747 (application/pdf)
http://www.sciedu.ca/journal/index.php/ijfr/article/view/14021 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:jfr:ijfr11:v:9:y:2018:i:4:p:51-62

DOI: 10.5430/ijfr.v9n4p51

Access Statistics for this article

International Journal of Financial Research is currently edited by Gina Perry

More articles in International Journal of Financial Research from International Journal of Financial Research, Sciedu Press
Bibliographic data for series maintained by Gina Perry ().

 
Page updated 2020-02-19
Handle: RePEc:jfr:ijfr11:v:9:y:2018:i:4:p:51-62