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Asia-Pacific Financial Markets

Erschienen in:

15.09.2018

A New Measure of Control-Cash Flow Deviation: Cases in Taiwan

verfasst von: Pei-Gi Shu, Sue-Jane Chiang, Man-Yin Chen

Erschienen in: Asia-Pacific Financial Markets | Ausgabe 4/2018

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Abstract

The traditionally defined measure of deviation fails to capture the possibility that controlling owners might pledge their shares for bank loans and with that money from bank loans to amplify their personal leverage in the stock market. In this study we construct a newly defined measure of deviation that includes pledge ratio into the definition. Using a sample of 2777 firm-year observations in the sampling period of 2011–2015, we find that the newly defined measure of deviation is negatively correlated with firm’s performance and are more capable of dictating firm’s performance than the traditionally defined measure. We further find that the newly defined deviation could better contrast the performance measures between normal firms and financially-distressed firms.

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Titel: A New Measure of Control-Cash Flow Deviation: Cases in Taiwan
verfasst von: Pei-Gi Shu
Sue-Jane Chiang
Man-Yin Chen
Publikationsdatum: 15.09.2018
Verlag: Springer Japan
Erschienen in: Asia-Pacific Financial Markets / Ausgabe 4/2018
Print ISSN: 1387-2834
Elektronische ISSN: 1573-6946
DOI: https://doi.org/10.1007/s10690-018-9251-8