Do Foreign Institutional Investors Care Corporate Governance Mechanismsof Stocks Firms？

• Main Authors: Cheng Hsiu-Chuan, 鄭秀娟
• Other Authors: Chen Yu-Fen
• Format: Others
• Language: zh-TW
• Published: 2015
• Online Access: http://ndltd.ncl.edu.tw/handle/96028282360088399222

碩士 === 大葉大學 === 管理學院碩士在職專班 === 103 === With the gradual opening up of foreign investment in Taiwan, the proportion of foreign institutional ownership increased year by year. It is believed that foreign institutional investors have specialties as well as big money investing in the stock market, so their trading attracts individual and domestic institutional investors quite a lot. The thesis intends to investigate whether foreign institutional investors care corporate governance mechanism as they are picking up their portfolios. The thesis uses sample firms listed in Taiwan Stock Exchange and Gre-Tai Securities Market from 2006 to 2013. The foreign institutional ownership is regressed on the variables of corporate governance mechanisms. The results indicate that foreign institutional investors prefer stock firms with high ratios of independent directors as well as block holders’ ownership. However, they avoid stock firms with high level of board internalization, high managers’ ownership and high deviation between board seat ratio and cash flow rights. The thesis also tests whether foreign institutional preferences change as facing the 2008 mortgage financial crisis. The results indicate that before the crisis, foreign institutional investors concern about the ratio of independent directors and block holders’ ownership. However, after the crisis, they concern the block holders’ ownership only. This thesis concludes that due to information asymmetry, the block holders’ ownership contains more information to foreign institutional investors.