Ownership structure, board of directors and firm performance: evidence from Taiwan

Purpose Using a data set of listed firms domiciled in Taiwan, this paper aims to empirically assess the effects of ownership structure and board of directors on firm value. Design/methodology/approach Using a sample of Taiwanese listed firms from 1997 to 2015, this study uses a panel estimation to exploit both the cross-section and time-series nature of the data. Furthermore, two stage least squares (2SLS) regression model is used as robustness test to mitigate the endogeneity issue. Findings The main results show that the higher the proportion of independent directors, the smaller the board size, together with a two-tier board system and no chief executive officer duality, the stronger the firm's performance. With respect to ownership structure, block-holders' ownership, institutional ownership, foreign ownership and family ownership are all positively related to firm value.