Are Outside Board Chairs Better Than Inside Board Chairs? Evidence From Taiwanese Family Firms

Authors

  • Pei-Ying Chen Tunghai University
  • Chia-Wei Chen Tunghai University
  • Bingsheng Yi California State University-Dominguez Hills
  • Jose N. Martinez California State University-Dominguez Hills

Keywords:

Family firms, board chair, Corporate Governance, Emerging markets, performance, Tobin's Q

Abstract

This paper compares the effect of inside and outside board chairs on firm performance using listed family firms in Taiwan from 2000 to 2018. We use Tobin’s Q and Return on Assets to measure firm valuation and operating performance. Family firms with an inside board chair exhibit undervaluation but better operating performance compared to family firms with an outside board chair. However, these results are nuanced and complex, with board independence counteracting on inside board chair. The results are robust using different samples and performance measures.

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Published

2022-12-31

How to Cite

Chen, Pei-Ying, Chia-Wei Chen, Bingsheng Yi, and Jose N. Martinez. 2022. “Are Outside Board Chairs Better Than Inside Board Chairs? Evidence From Taiwanese Family Firms”. Journal of Finance Issues 20 (3):1-17. https://jfi.aof-mbaa.org/index.php/jfi/article/view/4246.

Issue

Section

Original Article