Corporate ownership structure and the value relevance of family executives' external directorships

Liu Ching Tsai, Su Ling Chiou, Shing Jen Wu, Chaur-Shiuh Young

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)

Abstract

This study examines whether the core agency problems (i.e. the agency problems arising from controlling shareholders) affect investors' valuation on the external directorate networks of family executives. Using a sample of listed firms in Taiwan, we find that the relationship between family executives' external directorships and market valuation decreases with the level of the divergence in controlling shareholders' voting and their cash flow rights. This result implies that outside investors perceive that family executives accept outside board seats for the controlling owners' self-interest purposes at the expense of minority shareholders when controlling families possess more control than their equity ownership, which exacerbates the entrenchment effect of ownership concentration.

Original languageEnglish
Pages (from-to)223-249
Number of pages27
JournalAsia Pacific Management Review
Volume15
Issue number2
Publication statusPublished - 2010 Jun 1

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Strategy and Management

Fingerprint

Dive into the research topics of 'Corporate ownership structure and the value relevance of family executives' external directorships'. Together they form a unique fingerprint.

Cite this