A Study of the Relationships Between Corporate Governance and the Equity Capital Cost for Taiwan Listing Electronic Companies by Central Agency Problems.
|關鍵字:||控制股東;公司治理;核心代理問題;權益資金成本;Controlling Shareholder;Corporate Governance;Central Agency Problem;Equity Capital Cost|
Based on the central agency problem between controlling shareholder and minor shareholders, this research uses the five dimensions, which namely ownership structure, board composition, manage pattern, abnormal relatet party transaction, and stock overinvestment of controlling shareholder amounting to fourteen variables, to investage the relationships between central agency problem and the equity capital cost for Taiwain listing electronic companies. Empirical results are summarized below:1.In terms of ownership structure, the larger the cash flow rights of the controlling shareholder is, the larger the positive incentive effect is, and leads to higher equity capital cost.2.When the deviation between the voting rights and the cash flow rights is larger, it implys larger negative invasion effect and results in higher equity capital cost.3.In terms of the board composition, when controlling shareholder members occupy fewer directors or supervisor sits and the company has more independent directors or supervisors, the board is less dominated by controlling shareholder and leads to the lower equity capital cost. 4.In terms of management pattern, when the shares held by institutional investors are higher, the external monitors are better for the companies and lead to lower equity capital cost.5.In terms of abnormal related party transaction, there is no obvious relationships between the variable and the equity capital cost.6.In terms of stock overinvestment of the controlling shareholder, when the pledged share ratio and the overinvestiment ratio is higher, stock overinvestment behavior of the controlling shareholder is more apparent and results in higher equity cpital cost. We combine the fourteen variables into one Corporate Governance Index (CGI) and have shown that index is negatively related to equity capital cost. Higer CGI leads to lower equity cost because the central agency problem is slight and the interests of the minor shareholder could be less deprived by the controlling shareholder.