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Title: THE ASSOCIATION BETWEEN CORPORATE GOVERNANCE AND COMPANY SHARE REPURCHASES: EVIDENCE FROM TAIWANESE SMALL AND MID-SIZED COMPANIES
Authors: WANG CHIEN JEN, YU HSUAN PEI
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1WANG CHIEN JEN, 2YU HSUAN PEI 1. Associate professor of International Trade Dept., Takming University of Science and Technology, Taiwan. 2. International Trade Dept., Takming University of Science and Technology, Taiwan.
MLA 8 JEN, WANG CHIEN, and YU HSUAN PEI. "THE ASSOCIATION BETWEEN CORPORATE GOVERNANCE AND COMPANY SHARE REPURCHASES: EVIDENCE FROM TAIWANESE SMALL AND MID-SIZED COMPANIES." Int. j. of Social Science and Economic Research, vol. 5, no. 4, Apr. 2020, pp. 860-871, ijsser.org/more2020.php?id=62. Accessed Apr. 2020. APA(6) JEN, W., & PEI, Y. (2020, April). THE ASSOCIATION BETWEEN CORPORATE GOVERNANCE AND COMPANY SHARE REPURCHASES: EVIDENCE FROM TAIWANESE SMALL AND MID-SIZED COMPANIES. Int. j. of Social Science and Economic Research, 5(4), 860-871. Retrieved from ijsser.org/more2020.php?id=62 Chicago JEN, WANG CHIEN, and YU HSUAN PEI. "THE ASSOCIATION BETWEEN CORPORATE GOVERNANCE AND COMPANY SHARE REPURCHASES: EVIDENCE FROM TAIWANESE SMALL AND MID-SIZED COMPANIES." Int. j. of Social Science and Economic Research 5, no. 4 (April 2020), 860-871. Accessed April, 2020. ijsser.org/more2020.php?id=62.
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Abstract: This study uses Taiwan's small and mid-sized companies under NTD 10 billion market capitalization to explore the impact of when a company first implements a strategy of share repurchase. In the empirical results of this study, we can see that company stock prices go up right after the announcement of share repurchase. Before the announcement of share repurchase, the company debt ratio indicates the agency costs have a significantly negative effect on company abnormal returns. After the announcement, we can observe that corporate governance factors - directors' ownership and foreign institutions' ownership - are more significant than before the announcement, both having a significantly positive effect on company's abnormal returns. This illustrates that a good corporate governance system possesses monitoring effects on a company's performance. Meanwhile, the company's share prices, current ratio and post operating performance go up after the announcement. Frequent share repurchases often correlate with the signal of poor operating performance. This situation may be improved with a good corporate governance mechanism.

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