THE VOLUNTARY APPOINTMENT OF INDEPENDENT
DIRECTORS, FOREIGN OWNERSHIP AND CORPORATE
PERFORMANCE: EVIDENCE FROM TAIWAN

 

Jiun-Kai Huang
School of Management, Sanming University, Fujian, P.R. China

Jui-Hsi Cheng*
College of Business & Management, Xiamen Huaxia University, P.R. China
*Corresponding author: This email address is being protected from spambots. You need JavaScript enabled to view it.

Kai-Ping Huang
Department of Business Administration, Fu Jen Catholic University, Taiwan.

 

Abstract
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

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