Board Ownership and Firm Value in Taiwan - A Panel Smooth Transition Regression Model

Feng-Li Lin ()
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Feng-Li Lin: Department of Accounting, Chaoyang University of Technology, Taichung, Taiwan, No. 168 Jifong E. Rd., Wufong Township Taichung County, 41349, Taiwan, R.O.C.

Journal for Economic Forecasting, 2013, issue 4, 148-160

Abstract: Using a panel of 504 Taiwanese listed firms during a 10-year period (2002-2011), this study tests whether there is an optimal level of board ownership, which maximizes firm value. This work adopts Tobin’s Q as the proxy for firm value and finds that board ownership between 11.57% and 14.35% are an optimal level of board ownership to maximize firm value. This shift in financing sources propels the nonlinear relationship uncovered in this study and sheds light on Taiwan’s legal system of ownership structure.

Keywords: firm value; Tobin’s Q; board ownership; board of directors; entrenchment; panel smooth transition regression (search for similar items in EconPapers)
JEL-codes: C22 G31 G32 G34 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (2)

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