A Study on the Association of Corporate Governance and the Return of Stock Price

• Main Authors: Chun-Ming Chiu, 邱俊明
• Other Authors: Chun-An Lee
• Format: Others
• Language: zh-TW
• Published: 2005
• Online Access: http://ndltd.ncl.edu.tw/handle/41412880379403614217

碩士 === 國立雲林科技大學 === 財務金融系碩士班 === 93 === Several researches have found the central agency problem between block shareholders and minority shareholders would result in lower performance of firm. And corporate governance mechanism effectively discharge its monitoring function and mitigate central agency problem. In this paper, we examine whether stock price reflect information about corporate governance. We use data from May1995 to April 2003. The empirical results show that an investment strategy that bought firms in the lowest group of the index (G=0) and sold firms in the highest group of the index (G 4) would not have earned abnormal returns per year during the sample period. Further, during the pre-crisis period we find no evidence that stock price reflect information about corporate governance. But after the crisis, the result revealed there is evidence of overreaction of information about corporate governance in Taiwan stock market.