An Empirical Examination of the Relevance between Corporate Governance, Operation Risk, And Market Value

• Main Authors: Chun-Yi Kuo, 郭俊逸
• Other Authors: Cheng-Li Huang
• Format: Others
• Language: zh-TW
• Published: 2005
• Online Access: http://ndltd.ncl.edu.tw/handle/54831609589125769020

碩士 === 淡江大學 === 會計學系碩士班 === 93 === 　After passing the Asian financial storm, Taiwan　banking has begun to show signs of the quality of banking assets deteriorating and the overdue lending ratio rising. Those signs caused the banking profitability to a great extent decrease, and even some of the financial institutions faced the threat of bankruptcy, and triggered the financial crisis. A not well-being corporate governance mechanism is a primary reason to cause the Asian financial crisis. According to the documentary, good corporate governance can lower the dominating shareholder’s incentive to seize the assets of a company. This text is from bank governance evaluation to understand what kind of governance mechanism affects the bank operation risk and its value. Furthermore, I’d like to discuss the relationship between the bank operation risk and the bank value from the main study during 1999 to 2003, including the thirteen public-listed and OTC-listed financial holding subsidiary banks and seventeen independent banks. The empirical result suggests： 1、The dominating shareholders have the more power in cash 　flow control, the lower the bank operation risk, which 　　is consistent with the positive incentive effect. In 　　　addition, when the dominating shareholders deviated with 　the control right in cash flow control, then more 　　　　exploitation happens in minority shareholders, banks get 　higher risk of operation, and a negative seized 　　　　　motivation will be created. The major reasons of the 　　　divergence are adapting the strategy such as using 　　　　pyramid’s structure, cross shareholding, and purchasing 　proxy…etc., which are investing the lower capital but 　　with owning the higher voting right. 2、The size of board at banks, and the lending ratio of 　　relative party have direct correlation with the bank 　　　operation risk; However, the banks hold the existing 　　　secondary major shareholders have negative correlation 　　with the operation risk. 3、The banks hold the existing secondary major 　　　　　　　shareholders can effectively promote P/B ratio. 4、The capital adequacy ratio of banks, and adjusted net 　　worth per share have positive correlation with the bank 　value; but the overdue lending ratio has negative 　　　　correlation with bank value.