家族所有權與代理成本：家族所有權對短視研發投資行為與審計品質的影響;Founding Family Ownership and Agency Costs: the Impact of Family Ownership on Myopic R&Amp;D Investment Behavior and Audit Quality

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Title:	家族所有權與代理成本：家族所有權對短視研發投資行為與審計品質的影響;Founding Family Ownership and Agency Costs: the Impact of Family Ownership on Myopic R&Amp;D Investment Behavior and Audit Quality
Authors:	曹壽民;朱炫璉;金成隆;林維珩
Contributors:	國立中央大學企業管理學系
Keywords:	財政（含金融;保險）
Date:	2012-12-01
Issue Date:	2014-03-17 11:50:32 (UTC+8)
Publisher:	行政院國家科學委員會
Abstract:	研究期間：10108~10207;This study examines the impact of founding family ownership on myopic research and development (R&D) investment behavior (the first-year project) and audit quality (the second-year project). Myopic R&D investment behavior refers to a strategic underinvestment in R&D for the purposes of meeting short-term earnings goals. Agency theory suggests that the severity of agency problems is primarily responsible for myopia R&D investment behavior and audit quality; thus, we focus on myopia R&D investment behavior and audit quality to distinguish whether family firms exhibit more or less severe agency problems relative to nonfamily firms.We posit that family ownership affects myopia R&D investment behavior and audit quality in two competing ways: through an interest alignment effect and an entrenchment effect. Thus, the extent to which family ownership affects myopic R&D investment behavior depends on the net effect of these two competing forces. Our both first- and second-year projects contribute to the literature on family firms. Recent U.S.-based studies show that agency problems within U.S. family firms are less severe than agency problems within nonfamily firms (e.g., Anderson and Reeb, 2003; Anderson, Mansi, and Reeb, 2003b; Villalonga and Amit, 2006). However, recent studies within Asian countries (i.e., Faccio, Lang and Young, 2001; Lemmon and Lins, 2003) , which are commonly characterized by poor corporate governance and weak investor protection, provide evidence that family firms exhibit more severe agency problems relative to nonfamily firms due to their different institutional backgrounds. Our study complements this stream of literature by examining whether the family firm ownership structure, which is dominate in East Asian countries such as Taiwan, is a more or less effective organizational structure as compared to nonfamily firms. Our first-year project makes two contributions to the literature of myopia investment behavior. First, it reports the existence or nonexistence of myopic R&D investment behavior outside the United States. Second, prior literature of myopic investment behavior suggests that such behavior can be mitigated by higher insider and institutional ownership and R&D-based compensation schemes.We complement this literature by suggesting that the unique features of family firms, such as longer tenure, more concern over reputation, better monitoring of management, and better access to information, also play an important role in mitigating myopic investment behavior. Our second-year project contributes to the literature on auditor choice. First, although prior auditor choice studies focus on the impact of agency cost on the demand for audit quality, we contribute to the literature by identifying and separating the impact of agency cost from the demand and the supply of audit quality. Second, although studies focusing on the association management ownership and audit quality (e.g., Defond, 1992; Francis andWilson, 1988; Lennox, 2005) do not strongly support the predicted negative association between management ownership and audit quality, we add to this literature by suggesting that this negative association may be driven by family insiders rather than nonfamily insiders.We also argue that family insiders’ unique features such as better managerial oversight, better access to information, longer investment horizon, and more concern for reputation, rather than positions and substantial stocks, may account for this negative correlation.
Relation:	財團法人國家實驗研究院科技政策研究與資訊中心
Appears in Collections:	[Department of Business Administration ] Research Project

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