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THE VOLUNTARY APPOINTMENT OF INDEPENDENT DIRECTORS, FOREIGN OWNERSHIP AND CORPORATE PERFORMANCE: EVIDENCE FROM TAIWAN
- Jiun-Kai Huang, Jui-Hsi Cheng and Kai-Ping Huang
- Vol 11 Num 4 April 2019
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THE VOLUNTARY APPOINTMENT OF INDEPENDENT
DIRECTORS, FOREIGN OWNERSHIP AND CORPORATE
PERFORMANCE: EVIDENCE FROM TAIWAN
School of Management, Sanming University, Fujian, P.R. China
College of Business & Management, Xiamen Huaxia University, P.R. China
Department of Business Administration, Fu Jen Catholic University, Taiwan.
The purpose of this paper is to investigate the effects of foreign ownership, the volun-tary appointment of independent directors and corporate performance in Taiwan.
Using three different corporate performance measures as proxy for operation, achieved market and profit value, this study examines the influence of foreign ownership and the voluntary appointment of independent directors. Empirical results show that foreign ownership is likely firms with stable independent directors. Firms with stable inde-pendent directors perform better than those with interim independent directors, and the higher foreign ownership is the more significantly positive effects are. Interestingly, firms with appointment of independent directors above the minimum required level pos-itively affect firm value in the long-run. In contrast, during the deterioration of firm val-ue, appointed interim independent directors could be used to signal “firm’s ability” or aimed at appeasing unhappy investors.
Keywords: independent directors, foreign ownership, corporate governance, DEA