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Market Reaction to Voluntary and Mandatory Announcements of Independent Director Appointments

Year 2015, Volume: 5 Issue: 1, 125 - 135, 01.03.2015

Abstract

In this paper, we use a unique natural experimental setting to examine the market value of both voluntary and mandatory independent director appointments using a sample of Taiwanese listed firms. We find a significantly positive stock price reaction when a firm announces it is appointing independent directors to its board. Particularly, poor corporate performance and a higher degree of information asymmetry significantly benefit from the mandatory appointment. We conclude that the mandatory regulation for Taiwan listed firms to have a minimum number and ratio of independent directors on their boards appears to be a sound policy.

Year 2015, Volume: 5 Issue: 1, 125 - 135, 01.03.2015

Abstract

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Details

Other ID JA76FS55JJ
Journal Section Research Article
Authors

Hueh-chen Lin This is me

Chin-sheng Huang This is me

Jack J. W. Yang This is me

Publication Date March 1, 2015
Published in Issue Year 2015 Volume: 5 Issue: 1

Cite

APA Lin, H.-c., Huang, C.-s., & Yang, J. J. W. (2015). Market Reaction to Voluntary and Mandatory Announcements of Independent Director Appointments. International Journal of Economics and Financial Issues, 5(1), 125-135.
AMA Lin Hc, Huang Cs, Yang JJW. Market Reaction to Voluntary and Mandatory Announcements of Independent Director Appointments. IJEFI. March 2015;5(1):125-135.
Chicago Lin, Hueh-chen, Chin-sheng Huang, and Jack J. W. Yang. “Market Reaction to Voluntary and Mandatory Announcements of Independent Director Appointments”. International Journal of Economics and Financial Issues 5, no. 1 (March 2015): 125-35.
EndNote Lin H-c, Huang C-s, Yang JJW (March 1, 2015) Market Reaction to Voluntary and Mandatory Announcements of Independent Director Appointments. International Journal of Economics and Financial Issues 5 1 125–135.
IEEE H.-c. Lin, C.-s. Huang, and J. J. W. Yang, “Market Reaction to Voluntary and Mandatory Announcements of Independent Director Appointments”, IJEFI, vol. 5, no. 1, pp. 125–135, 2015.
ISNAD Lin, Hueh-chen et al. “Market Reaction to Voluntary and Mandatory Announcements of Independent Director Appointments”. International Journal of Economics and Financial Issues 5/1 (March 2015), 125-135.
JAMA Lin H-c, Huang C-s, Yang JJW. Market Reaction to Voluntary and Mandatory Announcements of Independent Director Appointments. IJEFI. 2015;5:125–135.
MLA Lin, Hueh-chen et al. “Market Reaction to Voluntary and Mandatory Announcements of Independent Director Appointments”. International Journal of Economics and Financial Issues, vol. 5, no. 1, 2015, pp. 125-3.
Vancouver Lin H-c, Huang C-s, Yang JJW. Market Reaction to Voluntary and Mandatory Announcements of Independent Director Appointments. IJEFI. 2015;5(1):125-3.