Please use this identifier to cite or link to this item: https://hdl.handle.net/2440/70538
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Type: Journal article
Title: An Ohlson valuation framework for valuing corporate governance: The case of Taiwan
Author: Lee, S.
Lin, C.
Chang, P.
Citation: Pacific-Basin Finance Journal, 2011; 19(4):420-434
Publisher: Elsevier BV, North-Holland
Issue Date: 2011
ISSN: 0927-538X
1879-0585
Statement of
Responsibility: 
Shih-Cheng Lee, Chien-Ting Lin, Pei-Ting Chang
Abstract: We examine the relation between a firm's market value, financial performance, and corporate governance as a cointegrated system in the Ohlson (1995) valuation framework. Using a comprehensive set of 29 governance measures in 4 categories for Taiwanese firms, we find that governance related to ownership structure and divergence between cash flow rights and control rights are important for a firm's market valuation. In particular, information about shareholdings of board directors and supervisors, shareholdings of controlling family, and voting rights are influential for firm value. Controlling for book value and residual incomes in the model, these governance measures track much of the remaining firm valuation that is unrelated to a firm's financial performance. Our findings provide some insight into the intrinsic value of corporate governance and the types of corporate governance mechanisms that are especially important for firms with similar ownership structure and controls. © 2011 Elsevier B.V.
Keywords: Corporate governance
Ohlson model
Ownership structure
Control rights
Rights: Copyright © 2011 Elsevier B.V. All rights reserved.
DOI: 10.1016/j.pacfin.2011.03.003
Published version: http://dx.doi.org/10.1016/j.pacfin.2011.03.003
Appears in Collections:Aurora harvest
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