Corporate Governance and Product Market Power: Evidence From Taiwan

The International Journal of Business and Finance Research, Volume 12, Number 1, 2018

12 Pages Posted: 12 Nov 2018

See all articles by Chong-Chuo Chang

Chong-Chuo Chang

Asia University

Shieh-Liang Chen

Asia University

Aini Farmania

Asia University

Feng-Tse Tsai

Asia University

Ping-Chao Wu

Asia University

Date Written: 2018

Abstract

The objective of this study is to investigate how a firm’s corporate governance affects its product market power. Adopting firms listed in the TSE and the OTC Exchange from 1996 to 2011, we find three main results. Firstly, better corporate governance leads to stronger product market power. Secondly, firms with higher research and development expenditure return on assets and market to book value have stronger market power while large and high leveraged firms are weak in product market power. Last but not least, cash holding plays an important role in deciding firms’ product market power. Companies with a high level of cash holding enjoy better product market power.

Keywords: Corporate Governance, Product Market Power, Agency Problems, Cash Holdings

JEL Classification: G34

Suggested Citation

Chang, Chong-Chuo and Chen, Shieh-Liang and Farmania, Aini and Tsai, Feng-Tse and Wu, Ping-Chao, Corporate Governance and Product Market Power: Evidence From Taiwan (2018). The International Journal of Business and Finance Research, Volume 12, Number 1, 2018. Available at SSRN: https://ssrn.com/abstract=3131899

Chong-Chuo Chang (Contact Author)

Asia University ( email )

Tokyo 180-8629
Japan

Shieh-Liang Chen

Asia University ( email )

Tokyo 180-8629
Japan

Aini Farmania

Asia University ( email )

Tokyo 180-8629
Japan

Feng-Tse Tsai

Asia University ( email )

500, Lioufeng Rd., Wufeng
Taichung, 41354
Taiwan

HOME PAGE: http://www.asia.edu.tw

Ping-Chao Wu

Asia University ( email )

Tokyo 180-8629
Japan

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