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J. Risk Financial Manag. 2019, 12(1), 32; https://doi.org/10.3390/jrfm12010032

Effect of Corporate Governance on Institutional Investors’ Preferences: An Empirical Investigation in Taiwan

1
International Bachelor Degree Program in Finance, National Pingtung University of Science and Technology, Neipu Pingtung 912, Taiwan
2
Graduate Institute of Finance, National Pingtung University of Science and Technology, Neipu Pingtung 912, Taiwan
*
Author to whom correspondence should be addressed.
Received: 31 December 2018 / Revised: 3 February 2019 / Accepted: 10 February 2019 / Published: 14 February 2019
(This article belongs to the Special Issue Empirical Finance)
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Abstract

This study discusses the institutional investors’ shareholding base on corporate governance system in Taiwan. The sample was 4760 Taiwanese companies from 2005 to 2012. Then, this study established six hypotheses to investigate the effects of corporate governance on institutional investors’ shareholdings. The panel data regression model and piecewise regression model were adopted to determine whether six hypotheses are supported. For sensitive analysis, additional consideration was given on the basis of industrial category (electronics or nonelectronics), and the 2008–2010 global financial crises. This study discovered that a nonlinear relationship exists between the domestic institutional investors’ shareholdings. The managerial ownership ratio and blockholder ownership ratio have positive effects both on domestic and foreign institutional investors. However, domestic and foreign institutional investors have distinct opinions regarding independent director ratios. Finally, the corporate governance did not improve institutional investors’ shareholdings during financial crisis periods; instead, they paid more attention to firm profits or other characteristics. View Full-Text
Keywords: institutional investors’ shareholdings; panel data model; piecewise regression model; global financial crisis institutional investors’ shareholdings; panel data model; piecewise regression model; global financial crisis
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This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).
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Lu, S.-L.; Li, Y.-H. Effect of Corporate Governance on Institutional Investors’ Preferences: An Empirical Investigation in Taiwan. J. Risk Financial Manag. 2019, 12, 32.

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