Measuring the Efficiency and the Effect of Corporate Governance on the Biotechnology and Medical Equipment Industries in Taiwan

Authors

  • Yen-Hsien Lee Chung Yuan Christian University
  • Ya-Ling Huang Chaoyang University of Technology
  • Shiuh-Sheng Hsu Ming Chuan University
  • Chien-Han Hung Tamkang University

Abstract

This study adopts data envelopment analysis with Tobit regression analysis to measure the efficiency and investigate the influence of corporate governance on the efficiency of the biotechnology and medical equipment industries in Taiwan. The empirical results show that while inside equity influences the efficiency of profitability in the pharmaceutical industry, both inside and outside equity influence the efficiency of profitability in the medical equipment industry. Moreover, both inside and outside equity influence the efficiency of marketability in the pharmaceutical and medical equipment industry. The proportion of shares held by foreign institutions is significantly positively correlated with the efficiency of profitability and negatively correlated with the efficiency of marketability, implying that the short-term profit goal of the foreign institutional investors is to sell their holdings. Besides, the number of board members and transparency of information are significantly positively correlated with both the efficiency of profitability and the efficiency of marketability.

Keywords: Data Envelopment Analysis; Biotechnology Industry; Corporate Governance; Transparency

JEL Classifications: D21; D24; G30; P27

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Author Biographies

Yen-Hsien Lee, Chung Yuan Christian University

Department of Finance

Ya-Ling Huang, Chaoyang University of Technology

Department of Golden-Ager Industry Management

Shiuh-Sheng Hsu, Ming Chuan University

Graduate School of Management

Chien-Han Hung, Tamkang University

Department of Banking and Finance

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Published

2013-04-02

How to Cite

Lee, Y.-H., Huang, Y.-L., Hsu, S.-S., & Hung, C.-H. (2013). Measuring the Efficiency and the Effect of Corporate Governance on the Biotechnology and Medical Equipment Industries in Taiwan. International Journal of Economics and Financial Issues, 3(3), 662–672. Retrieved from https://www.econjournals.com/index.php/ijefi/article/view/407

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