حاکمیت شرکتی و جانشینی خانواده: شواهد جدید از تایوان Corporate governance and family succession: New evidence from Taiwan

1. Introduction The prevalence and importance of family firms, as well as their impact on local economies, are by now well recognized around the world. While there are many corporate governance and finance issues that have an important bearing on family owned firms, among the most critical of these is succession. Burkart et al. (2003) and Franks et al. (2012) found that the level legal protection for investors is an important influence on succession decisions. Moreover changes in laws and regulations will influence the quality of corporate governance. The impact of enhanced laws and regulations and improved corporate governance on family succession raises important questions, namely: 1) whether the probability of family succession decreases when laws and regulations, as well as the quality of corporate governance, improve over the succession period; and 2) whether stronger laws, regulations, and improved corporate governance reduce the risks of succession, or enhance stock performance over the succession period This paper takes a closer examination of these questions on succession in Taiwanese family firms. There are several reasons for this. First, as in many countries around the globe, family ownership and succession is highly prevalent in Taiwanese listed firms. Second, as in other countries in the wake of the Enron collapse, key amendments to laws and regulations introduced in 2002 and 2007 significantly improved the level of investor protection in Taiwan which in turn had a profound impact on the succession patterns of family firms. Third, as a succession event is generally associated with transferring control from a family controller to another related family member (i.e. an offspring or close relative) or to an unrelated outsider in the case of a resignation, Taiwan can provide a very detailed and rich source of family succession and corporate governance data.