The Impact of Managerial Power and Debt on Firm Performance

• Main Authors: LIN, XIU-LING, 林綉綾
• Other Authors: YANG, LEE-WEN
• Format: Others
• Language: zh-TW
• Published: 2017
• Online Access: http://ndltd.ncl.edu.tw/handle/5k8fmm

碩士 === 朝陽科技大學 === 會計系 === 105 === The corporate deliberately separates its ownership from management by engaging a professional manager to promote business achievements and maximize the benefits of its shareholders. However, there consequently exists the agency problem between the manager and shareholders. To restrain the derived matters, corporate governance devices may be implemented, such as organizing the board of directors, to diminish the unfavorable decision to the company made by the manager (Berle and Means 1932; Fama and Jensen 1983). Some scholars, on the other hand, hold the opinion that the manager will eventually influence firm performance through his/her efforts and power to the corporate decision-making. Whether the managerial power exerts an influence on firm performance remains a question for consideration. This study probed into the following issues, by applying Least Squares Method to conduct empirical analysis, whether, in a public company, distinct managerial powers act on firm performance and whether distinct managerial powers and debt ratios have an interactive function with firm performance. The empirical result indicated that the more shareholding ratio the chairman has, the stronger managerial power he/she accordingly possesses, the higher rate of return the shareholders will earn. Whereas the chairman does not simultaneously portray the role of general manager, his/her managerial power will, as a result, get lower, but the shareholders still gain higher rate of return. Diverse agency variables of the managerial power reveals inconsistent significance concerning its influence on firm performance. The chairman’s shareholding ratio and debt level have close connection with business achievements; yet, whether the chairman and the general manager are the same person and how his/her debt level is make no momentous interaction with management performance. The empirical result also showed discordant outcome regarding the situation whether distinct debt levels and managerial powers bring up an interaction with the firm’s management performance.