A Study on Efficiency Monitoring and Interest Assimilation in Corporate Governance: Listed Companies in Taiwan

Yao-Hung Yang, Ya-Hui Lin and Ghi-Feng Yen

Emerging Markets Finance and Trade, 2012, vol. 48, issue 0, 169-183

Abstract: This paper examines whether efficiency monitoring has a positive influence on corporate performance by using the fixed effect model with panel data of listed firms in Taiwan from 2005 to 2010. The results show that having a shared interest group, formed by the controlling shareholders of a company and its board directors, leads to a failing monitoring function of the board of directors. Moreover, greater divergence between the number of board seats controlled and voting rights leads to a higher likelihood of corporate performance appearing to be an inverted curve. If this divergence exceeds a certain threshold, the interests of external shareholders may be harmed by large shareholders.

Keywords: board-seat control-voting rights divergence; controlling shareholder; corporate performance; interest assimilation; shared interest group (search for similar items in EconPapers)
Date: 2012
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