The Analysis of Stock Price Effect of Corporation Governance Announcement
|Keywords:||臺灣公司治理100指數;公司治理評鑑;事件日研究法;TWSE Corporate Governance 100 Index;Corporate Governance Evaluation;Event Study|
The government of Taiwan regulates the first Corporate Governance Evaluation instructions and indicators of the operation. The government then send it to all listed company to instruct them to do self-assessment, which is the first time that the Taiwan government makes all listed company to do so. In addition, the Taiwan Stock Exchange (TWSE) follows Corporate Governance Evaluation and selects 100 stocks to form The ‘TWSE Corporate Governance 100 Index’, hoping to guide the investors how to make investment on the constituent stocks, and also to encourage corporations to work on their corporate governance. This research uses Corporate Governance Evaluation and stock price, which are included in TWSE Corporate Governance 100 Index, to discuss the relevant abnormal return with event study. It is known that the company which included in the index will creates positive abnormal return and it also creates positive abnormal return to constituent stock once the news has released. In addition, the ANOVA analysis shows that the constituent stocks, which are included in first and second TWSE Corporate Governance 100 Index and also in the Electronics industry, has significant higher abnormal return in the news reporting day than that in the non -Electronics industry.The key factor in empirical results of this research is that if a company has good corporate governance will receive positive rewards on its performance in stock market. This further shows that the importance of corporate governance to the corporation.
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