Voluntary Adoption of Audit Committees, Ownership Structure and Firm Performance: Evidence from Taiwan

Junmao Chiu, Huimin Chung, Shih Chang Hung*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

10 Scopus citations

Abstract

Based on exogenous policy in corporate governance reform, this study examines how the voluntary adoption of audit committees affects firm performance and risk. We use a self-selection model to investigate the effect of voluntary adoption of audit committees on Tobin’s Q, return on assets, and idiosyncratic risk. Our results show that Taiwanese listed firms, especially those that are family controlled, have better performance and lower risk when they voluntarily adopt audit committees. Our results suggest that voluntary adoption of audit committees can reduce agency conflict and asymmetric information.

Original languageEnglish
Pages (from-to)1514-1542
Number of pages29
JournalEmerging Markets Finance and Trade
Volume57
Issue number5
DOIs
StatePublished - 20 Jul 2021

Keywords

  • agency conflict
  • audit committee
  • firm performance
  • G32
  • G38
  • idiosyncratic risk
  • voluntary adoption

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