Share Centralization, Investor Sentiment and Firm Performance

Chia-Hsin Cheng

doi:doi:10.11648/j.ijber.20190803.11

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Share Centralization, Investor Sentiment and Firm Performance

Chia-Hsin Cheng

Published in International Journal of Business and Economics Research (Volume 8, Issue 3)

Received: 16 March 2019 Accepted: 6 May 2019 Published: 29 May 2019

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Abstract

The purpose of this paper is to identify how internal corporate governance and external investor sentiment impacts the operating performance of the firm. The corporate governance mechanism affects the firm’s operating activities, and transfers its results to outside investors by public financial reports. Since the universal uninformed investors could only identify the firm’s net income instead of accrual earnings, this paper reflects the “visible” accounting number to represent investors’ received information differently from literatures. Sampling the Taiwanese listed companies from 2007 to 2014, I demonstrate variable definition, build regression models and examine them by full sample analysis and by grouping analysis. The results show three points contributed to professional and business field. The first is that both the higher investor sentiment and the larger shareholding percentage of the board are relevant to reported performance. In addition, because the investor sentiment is encouraged by firm’s net income, the managers should devote to better earnings for borrowing equity capital when the firm’s debt ratio is high. Finally, only in the situation that the enterprise faces low investor sentiment and little shareholding of the board is the shareholding percentage negative relationship to the operating performance. It infers that instead of informing the firm’s prospect to the outside investors, the board might hold on its share right inside of the firm.

Published in	International Journal of Business and Economics Research (Volume 8, Issue 3)
DOI	10.11648/j.ijber.20190803.11
Page(s)	78-84
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Corporate Governance, Investor Sentiment, Operating Performance, Share Concentration

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APA Style

Chia-Hsin Cheng. (2019). Share Centralization, Investor Sentiment and Firm Performance. International Journal of Business and Economics Research, 8(3), 78-84. https://doi.org/10.11648/j.ijber.20190803.11

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Chia-Hsin Cheng. Share Centralization, Investor Sentiment and Firm Performance. Int. J. Bus. Econ. Res. 2019, 8(3), 78-84. doi: 10.11648/j.ijber.20190803.11

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AMA Style

Chia-Hsin Cheng. Share Centralization, Investor Sentiment and Firm Performance. Int J Bus Econ Res. 2019;8(3):78-84. doi: 10.11648/j.ijber.20190803.11

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@article{10.11648/j.ijber.20190803.11,
  author = {Chia-Hsin Cheng},
  title = {Share Centralization, Investor Sentiment and Firm Performance},
  journal = {International Journal of Business and Economics Research},
  volume = {8},
  number = {3},
  pages = {78-84},
  doi = {10.11648/j.ijber.20190803.11},
  url = {https://doi.org/10.11648/j.ijber.20190803.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20190803.11},
  abstract = {The purpose of this paper is to identify how internal corporate governance and external investor sentiment impacts the operating performance of the firm. The corporate governance mechanism affects the firm’s operating activities, and transfers its results to outside investors by public financial reports. Since the universal uninformed investors could only identify the firm’s net income instead of accrual earnings, this paper reflects the “visible” accounting number to represent investors’ received information differently from literatures. Sampling the Taiwanese listed companies from 2007 to 2014, I demonstrate variable definition, build regression models and examine them by full sample analysis and by grouping analysis. The results show three points contributed to professional and business field. The first is that both the higher investor sentiment and the larger shareholding percentage of the board are relevant to reported performance. In addition, because the investor sentiment is encouraged by firm’s net income, the managers should devote to better earnings for borrowing equity capital when the firm’s debt ratio is high. Finally, only in the situation that the enterprise faces low investor sentiment and little shareholding of the board is the shareholding percentage negative relationship to the operating performance. It infers that instead of informing the firm’s prospect to the outside investors, the board might hold on its share right inside of the firm.},
 year = {2019}
}

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TY  - JOUR
T1  - Share Centralization, Investor Sentiment and Firm Performance
AU  - Chia-Hsin Cheng
Y1  - 2019/05/29
PY  - 2019
N1  - https://doi.org/10.11648/j.ijber.20190803.11
DO  - 10.11648/j.ijber.20190803.11
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 78
EP  - 84
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20190803.11
AB  - The purpose of this paper is to identify how internal corporate governance and external investor sentiment impacts the operating performance of the firm. The corporate governance mechanism affects the firm’s operating activities, and transfers its results to outside investors by public financial reports. Since the universal uninformed investors could only identify the firm’s net income instead of accrual earnings, this paper reflects the “visible” accounting number to represent investors’ received information differently from literatures. Sampling the Taiwanese listed companies from 2007 to 2014, I demonstrate variable definition, build regression models and examine them by full sample analysis and by grouping analysis. The results show three points contributed to professional and business field. The first is that both the higher investor sentiment and the larger shareholding percentage of the board are relevant to reported performance. In addition, because the investor sentiment is encouraged by firm’s net income, the managers should devote to better earnings for borrowing equity capital when the firm’s debt ratio is high. Finally, only in the situation that the enterprise faces low investor sentiment and little shareholding of the board is the shareholding percentage negative relationship to the operating performance. It infers that instead of informing the firm’s prospect to the outside investors, the board might hold on its share right inside of the firm.
VL  - 8
IS  - 3
ER  -

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Author Information

Chia-Hsin Cheng

Business School, Yulin Normal University, Yulin, China

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APA Style

Chia-Hsin Cheng. (2019). Share Centralization, Investor Sentiment and Firm Performance. International Journal of Business and Economics Research, 8(3), 78-84. https://doi.org/10.11648/j.ijber.20190803.11

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ACS Style

Chia-Hsin Cheng. Share Centralization, Investor Sentiment and Firm Performance. Int. J. Bus. Econ. Res. 2019, 8(3), 78-84. doi: 10.11648/j.ijber.20190803.11

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AMA Style

Chia-Hsin Cheng. Share Centralization, Investor Sentiment and Firm Performance. Int J Bus Econ Res. 2019;8(3):78-84. doi: 10.11648/j.ijber.20190803.11

Copy | Download

@article{10.11648/j.ijber.20190803.11,
  author = {Chia-Hsin Cheng},
  title = {Share Centralization, Investor Sentiment and Firm Performance},
  journal = {International Journal of Business and Economics Research},
  volume = {8},
  number = {3},
  pages = {78-84},
  doi = {10.11648/j.ijber.20190803.11},
  url = {https://doi.org/10.11648/j.ijber.20190803.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20190803.11},
  abstract = {The purpose of this paper is to identify how internal corporate governance and external investor sentiment impacts the operating performance of the firm. The corporate governance mechanism affects the firm’s operating activities, and transfers its results to outside investors by public financial reports. Since the universal uninformed investors could only identify the firm’s net income instead of accrual earnings, this paper reflects the “visible” accounting number to represent investors’ received information differently from literatures. Sampling the Taiwanese listed companies from 2007 to 2014, I demonstrate variable definition, build regression models and examine them by full sample analysis and by grouping analysis. The results show three points contributed to professional and business field. The first is that both the higher investor sentiment and the larger shareholding percentage of the board are relevant to reported performance. In addition, because the investor sentiment is encouraged by firm’s net income, the managers should devote to better earnings for borrowing equity capital when the firm’s debt ratio is high. Finally, only in the situation that the enterprise faces low investor sentiment and little shareholding of the board is the shareholding percentage negative relationship to the operating performance. It infers that instead of informing the firm’s prospect to the outside investors, the board might hold on its share right inside of the firm.},
 year = {2019}
}

Copy | Download

TY  - JOUR
T1  - Share Centralization, Investor Sentiment and Firm Performance
AU  - Chia-Hsin Cheng
Y1  - 2019/05/29
PY  - 2019
N1  - https://doi.org/10.11648/j.ijber.20190803.11
DO  - 10.11648/j.ijber.20190803.11
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 78
EP  - 84
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20190803.11
AB  - The purpose of this paper is to identify how internal corporate governance and external investor sentiment impacts the operating performance of the firm. The corporate governance mechanism affects the firm’s operating activities, and transfers its results to outside investors by public financial reports. Since the universal uninformed investors could only identify the firm’s net income instead of accrual earnings, this paper reflects the “visible” accounting number to represent investors’ received information differently from literatures. Sampling the Taiwanese listed companies from 2007 to 2014, I demonstrate variable definition, build regression models and examine them by full sample analysis and by grouping analysis. The results show three points contributed to professional and business field. The first is that both the higher investor sentiment and the larger shareholding percentage of the board are relevant to reported performance. In addition, because the investor sentiment is encouraged by firm’s net income, the managers should devote to better earnings for borrowing equity capital when the firm’s debt ratio is high. Finally, only in the situation that the enterprise faces low investor sentiment and little shareholding of the board is the shareholding percentage negative relationship to the operating performance. It infers that instead of informing the firm’s prospect to the outside investors, the board might hold on its share right inside of the firm.
VL  - 8
IS  - 3
ER  -

Copy | Download