A note on board characteristics,ownership structure and default risk in Taiwan |
| |
| Authors: | Shu‐Mei Chiang Huimin Chung Chien‐Ming Huang |
| |
| Institution: | 1. Department of Finance, Lunghwa University of Science and Technology, Guishan, Taiwan;2. Graduate Institute of Finance, National Chiao Tung University, Hsinchu, Taiwan;3. Department of Banking and Finance, Tamkang University, New Taipei City, Taiwan |
| |
| Abstract: | This study applies dynamic generalized method of moments estimation to examine the influences of ownership structure and board characteristics on default risk for a full samples and two subsamples (high‐tech and conventional) of publicly listed firms in Taiwan. Our findings reveal that certain characteristics of corporate governance have explanatory power for default probability, but the impact is not straightforward. In particular, the impact of internal and external governance structures on default risk is industry dependent. Accordingly, governance proposals that encourage higher ownership among directors and large block shareholdings in high‐tech firms or reduce managerial ownership in conventional companies can have a counterproductive effect on corporate governance and result in higher bankruptcy possibility. |
| |
| Keywords: | Corporate governance Default risk Ownership structure Board characteristics Kealhofer McQuown and Vasicek model |
|
|
