《An Ohlson valuation framework for valuing corporate》.pdf

Pacific-Basin Finance Journal 19 (2011) 420–434 Contents lists available at ScienceDirect Pacific-Basin Finance Journal journal homepage: /locate/pacfin An Ohlson valuation framework for valuing corporate governance: The case of Taiwan Shih-Cheng Lee a,b, Chien-Ting Lin c,⁎, Pei-Ting Chang a a College of Management, Yuan Ze University, Chung-Li, Taiwan b University of Adelaide Business School, Adelaide, SA, Australia c School of Accounting, Economics, and Finance Deakin University, Burwood, VIC, Australia a r t i c l e i n f o a b s t r a c t Article history: We examine the relation between a firms market value, financial Received 27 July 2010 performance, and corporate governance as a cointegrated system in the Accepted 24 March 2011 Ohlson (1995) valuation framework. Using a comprehensive set of 29 Available online 31 March 2011 governance measures in 4 categories for Taiwanese firms, we find that governance related to ownership structure and divergence between JEL classifi cation: cash flow rights and control rights are important for a firms market G34 valuation. In particular, information about shareholdings of board M41 directors and supervisors, shareholdings of controlling family, and Keywords: voting rights are influential for firm value. Controlling for book value and Corporate governance residual incomes in the model, these governance measures track