This dissertation discusses three issues. First, we provide a thorough survey of political connections in the essay “A Survey of Political Connection Literature.” Then two empirical studies on political connections are presented in the following two essays, “Do Political Preferences Affect Investor Trading Behavior and Market Reaction?” and “The Relationship between Ownership Structure and the Value of Political Connections: Evidence from the Taiwanese Presidential Election and Global Financial Crisis of 2008,” respectively. Last, we present the conclusions in the final chapter. From the survey in the first essay, the impacts of political connections on firm value and corporate finance issues are discussed. A number of recent studies have found that political connections create value for firms when these connections are considered beneficial. Thus, in the second essay, we are motivated to investigate what kind of stock market investors would take such advantages that increase the value of their portfolio. We are also motivated by the argument in the literature that the officials’ rent-seeking behavior to establish political connections may bear some costs for the firms. Then, in the third essay, we address the question whether the value of political connections is associated with the firms’ managerial ownership structure. We organize our three essays into Chapters 2 to 4, respectively, and we briefly describe these issues below. Chapter 2 provides the theoretical and empirical background of this dissertation. We survey extant research on political connections, with special attention to its importance on corporate finance. First we discuss whether and how political connections affect firm value. Then we turn to the channel through which political connections affect firm value. For instance, political connections help firms obtain more external funds with lower costs, which results in a decline in the required rate of return and an increase in the market value. Studies that discuss the characteristics of politically connected firms are also surveyed in this essay. In Chapter 3, the essay discusses whether or not political preferences bring value to a firm. We approach the issue by checking the share trading and stock returns of politically connected firms during the 2008 Taiwanese Presidential Election. In particular, we classify investors into sophisticated and non-sophisticated investors. The political preference hypothesis is proposed to explore whether the trading behavior of the two types of investors shifts when their favorite political party loses or wins during a Presidential Election. First, a sophisticated investor holds more shares in the firm connected with the winning political party, but has fewer shares in the losing party. However, this may not hold for non-sophisticated investors. Second, firms connected with the winning party exhibit positive stock returns, whereas firms connected with the losing party do not experience the same success. Finally, the increment shares of sophisticated investors in firms connected with the winning party are positively correlated with the stock returns around the time of the election. Specifically, sophisticated investors invest more on firms connected with the winning party, thus obtaining more abnormal returns. However, the results may not hold for non-sophisticated investors. Consequently, foreign investors are found to be sophisticated investors and political preference brings market value to this kind of investors. In Chapter 4, the essay examines the relationship between ownership structure and the value of political connections. We address this issue with the data of Taiwanese publicly-traded firms during the 2008 Taiwanese Presidential Election and the 2008 global financial crisis. First, following the literature, the value of political connections is examined through the positive abnormal stock returns of the winning-party-connected firms during the election. Then we find a negative relationship between the value of political connections and the deviation of management group’s control rights from cash flow rights. Second, using the collapse of Lehman Brothers as an exogenous shock to control for the overall decline in investment opportunity, we find that politically connected firms with managers possessing more excess control rights underperformed in stock returns than firms without such potentially entrenched managers. Thus, studies that do not consider the inverse impacts of potential expropriation tend to present an incomplete picture of the value of political connections.

從企業績效來看，在需持續創新、風險與產業技術複雜性較高的電子業，家族企業若聘用專業經理人經營，企業績效較差，反之，在產業技術變化性與風險較低的傳統產業，家族企業聘用專業經理人經營，反而企業績效較佳，這顯示，在面臨高度風險的環境時，家族企業中經營權與所有權的分離才會導致代理問題。同樣地，在電子業中，家族企業的控制權與所有權分離程度越高，企業績效越差，反之，在傳統產業中，家族企業控制權與所有權分離程度越高，企業績效反而越佳。這個結果顯示，在需持續創新、風險與產業技術複雜性較高的產業中，家族企業必須同時面臨兩種代理問題。 從企業對創新這類風險性投資的策略來看，本論文的研究結果顯示，經營權與所有權合一，企業所有者有能力及意願監督經營者，這將有助於企業投入較多的創新。反之，在控制權與所有權分離的情況下，因為投資的大部分是其他人的錢，企業的最終控制者能將創新的風險分散給外部股東，而較有意願投入創新。而家族控制者本身，因其規避風險的特質，而對上述兩類對創新有正向影響的治理機制有負向的調節效果（moderate）。但對家族成員而言，創新有助於企業的長期競爭優勢為了家族的永續發展，在經營企業上應該會採取長遠觀點（long-term perspective），而有意願投入創新，為了解開這個難題，本研究進一步將創新分為利用型創新（exploitative innovation）及開創型創新（explorative innovation）兩類，分析結果發現，家族企業雖然投入創新的數目較少，但在比例上有較多是較開創的創新，這個結果顯示，家族企業雖然害怕風險，但相對於非家族企業仍較具有長期經營的觀點並較具開創性。 / This dissertation concerns the effects of different governance structures on firms’ performance and innovativeness in business groups. In the first study, the ambivalent needs of control and growth of family firms in business group are explored. This study finds that in general, the excess control rights and controlling shareholdings will increase firms’ performance. In addition, family firms with such control structures will perform better in non-electronic industry while worse in electronic industry. Lastly, active control, namely family members control management and chairman at the same time, will perform better in electronic industry while worse in non-electronic industry. The second study focuses on comparing family and non-family group affiliated firms’ incentives to do innovations in different governance structures. Adopting behavior agent model, we propose that although family group affiliated firms are less innovativeness than non-family group affiliated firms in general, they have larger share of exploratory innovation than non-family firms. The empirical results support our hypotheses. However, in contrast to traditional agency perspective, the separations between ownership and control rights facilitate firms’ innovativeness. This finding may originate in pyramid ownership structure.

所有權結構、支付制度與競爭係影響醫院績效之關鍵因子，本研究援用相關文獻之發現，推論出三項因素對醫院績效之關係，並以我國獨特之總額預算制度為研究對象，蒐集、串連與合併不同來源之資料，實證檢視衝量競爭與所有權結構對醫院營運績效與醫療品質之聯合效果。 台灣於民國91年7月實施醫院總額預算制度後，浮動點值制度之設計為醫院間引入了衝量競爭(即虛假價格競爭)，而結算後之點值則係反映出醫院間衝量競爭後之結果，醫院除了需面對支付點值所致之財務衝擊外，尚須面對自全民健保實行後，備受醫院詬病之核減制度之衝擊，因此，本文首先嘗試估算醫院受到核減與支付點值所致之財務衝擊程度。無論是國外或國內之研究，對於不同所有權結構醫院之績效表現是否有差異性，一直無法獲得一致性之結論，除了納入營運效率之績效指標外，本研究亦採用疾病別與醫院層級別之醫療品質指標來檢視不同所有權結構醫院之績效表現。更以考量核減與支付點值所致之財務衝擊程度，取代目前文獻僅以總額前、後之二元變數，評估財務衝擊程度對營運效率、醫療品質與財務績效之影響。最後，則是檢視總額預算制度下，醫院受到之財務衝擊度是否會縮小不同所有權結構醫院之營運效率與醫療品質表現之差距。 實證研究發現，不同所有權結構醫院之營運效率並未有顯著差異，但不同所有權結構醫院在某些疾病別品質指標(子宮肌瘤切除手術之住院超過7日機率與再入院率)與醫院層級品質指標(院內感染率與淨死亡率)表現上則有差異性；且公立或非營利醫院受到核減與支付點值之財務衝擊高於私立醫院，因此不同所有權結構醫院之行為與績效存有某些差異性。台灣的醫院在總額預算制度下，若受到之財務衝擊程度愈大，其營運效率會變差、醫療品質也受到負面之影響、財團法人醫院之醫務利益率與稅後淨利率也會降低，但現金流量比則會增加，故財務衝擊愈大，醫院之績效愈低。若同時考量財務衝擊度對不同所有權結構醫院之營運效率與醫療品質之聯合效果後，可發現財務衝擊雖然不會縮小公立(或非營利)醫院與私立醫院營運效率之差距，卻縮小公立(或非營利)醫院與私立醫院醫療品質之差距，故以台灣資料可部分支持「不同所有權結構醫院績效差距縮小之因素係競爭力量之崛起」之論點。 / Hospital ownership, payment system and competition are all key drivers to influence hospital performance. This research infer and depict the association of these three drivers from the related literature and empirically examined the effects of fictitious price competition due to the floating point-value system and ownership on hospital operational performance and quality of care by combing and merging different sources of data. Deduction rate of claim and the floating point-value system are the two controversial debates to the payment system. I attempt to estimate hospital financial pressures as precipitated by deduction rate of claim and floating point-value system. To investigate whether for-profit, not-for-profit, and government hospitals differ in operating performance and quality of care, five diagnose-level and two hospital-level quality indicators are selected. Different from prior research, the financial pressure is captured by hospital data instead of a binary variable (pre and post global budget) and I examine the effect of financial pressure on hospital operational efficiency, quality of care and financial performance. Finally, we test whether differences in operational efficiency and quality care among hospitals with different ownership forms will mitigate or narrow, as hospital financial pressure increases. The results show that for-profit, not-for-profit and government hospitals are far more alike than different in operational efficiency, but ownership affects not only the rate of readmission and the rate of the length of stay larger than 7 days of uterine myomectomy, but also the hospital-level quality indicators: the rate of nosocomial infection and hospital mortality rate. I also find higher financial pressure incurred at government or not-for-profit hospitals than for-profits hospitals. Given my findings, we conclude that hospital ownership status affect performance in terms of quality of care and financial pressure from rate of deduction and float point-value system. The study shows that financial pressure adversely affects operational efficiency and quality of care. As not-for proprietary hospital financial pressure increases, the profit margin and net profit ratio will decrease, but the cash flow ratio will increase. Nonetheless, deduction rate of claim and global budget has a negative impact on hospital performance. This research further considers the joint effect of financial pressure on difference between quality of care and efficiency of for-profit hospitals and the other two types. My results indicate that hospital financial pressure mitigates the difference of quality of care between for-profit hospital and not-for profit (or government) hospitals, but does not narrow the difference in quality of care between for-profit hospital and not-for profit (or government) hospitals. This finding partly supports that increased competition should force not-for-profit (or governmental) hospitals to be increasingly similar to their for-profit counterparts.