Types of Ownership, Motivations, and International Expansion: The Experience of Business Groups in Taiwan
Keywords:
Types of Ownership, Business Groups, Taiwan, International expansionAbstract
In this paper, we tested two main hypotheses. Based on agency theory, we first discuss different types of owners in firms, including family, foreign investors, and government. While managers, a typical type of agents, are expected to pursue diversification for their
benefits, we hypothesize that each type of ownership is negatively or positively related to diversification in the context of Taiwan. Data consists of 224 business groups in Taiwan. Results from the regression analysis show that, while family ownership behaves risk-averse to international diversification, foreign ownership and government ownership are positively related to international diversification. We confirm that different types of ownership have conflicting interests to international diversification.
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