The Relationship between Ownership Structure and the Probability of a Financial Distress Warning Happening: Evidence of Listed Common Stock Companies in Taiwan

Ching-Chun Wei, Wen-Xin Fang, Guan-Hua Li, Yu-Wen Kao, Miao-Lin Tsai and Ching-Yi Yang

Applied Economics and Finance, 2017, vol. 4, issue 1, 34-42

Abstract: This paper discusses about the ownership structure of firms and the probability of a financial distress warning happening in Taiwan. Our sample covers all listed common stock companiesexceptthe financial industry from 2006 to 2014. This study usesthe Z-score to measure the probability of firms¡¯ financial distress warning happening and employs the shareholding ratio of managerial share ownership, the shareholding ratio of financial institutional investors, and the size of the board of directors to measure firms¡¯ ownership structure. For our results, the shareholding ratio of managerial share ownership has positive relationship with the probability of a financial distress warning happening, while the shareholding ratio of institutional investors and the size of the board of directors have a negative relationship with the probability of the same warning happening.

Keywords: ownership structure; financial distress warming; shareholding ratio of investors; board ofdirectors (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (1)

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