English Abstract
Drawing on agency theory and the institutional perspective, this paper aims to examine the relationship between corporate governance and cash holdings for the business group-affiliated firms listed on the Taiwan Stock Exchange and in the Over-The-Counter market. The empirical results reveal that the group-affiliated firms hold more cash than non-affiliated firms. The findings show that the entrenched business group effects dominate the institutional network group¡¦s effects and indicate that the presence of a pyramidal group ownership structure in the group-affiliated firms leads to a principal-principal conflict and therefore an increase in agency problems.
To avoid the confounding effect by which the different corporate governance mechanisms would lead to different predictions regarding corporate governance effectiveness, this paper constructs a corporate governance index by aggregating the six characteristics related to corporate governance effectiveness: the cash flow rights, the control-cash flow rights deviation, the control-affiliated directors, the control-affiliated supervisors, board independence, and the ITDRS rankings. The results show that good governance mechanisms are effective in mitigating the principal-principal agency costs and moderating the effect of group affiliation in affiliated firms¡¦ cash holdings.
Keywords: Business Group-Affiliated Firms, Cash Holdings, Corporate Governance, Board Structure, Group Diversity
| Identifer | oai:union.ndltd.org:NSYSU/oai:NSYSU:etd-0906112-154619 |
| Date | 06 September 2012 |
| Creators | Tsai, Ching-Chieh |
| Contributors | Wen-Hua Shen, Ruey-Dang Chang, Pei-How Huang, Yeun-Wen Chang, Anlin Chen, Chi-Cheng Wu |
| Publisher | NSYSU |
| Source Sets | NSYSU Electronic Thesis and Dissertation Archive |
| Language | English |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | http://etd.lib.nsysu.edu.tw/ETD-db/ETD-search/view_etd?URN=etd-0906112-154619 |
| Rights | unrestricted, Copyright information available at source archive |
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