Management Review

Vol. 42 No.3, Jul. 2023

Robin K. Chou　Editor’s Note (excerpt)

This issue of Management Review contains three academic articles.

The first article, “The Impact of Family Business and Board Structure on Corporate Governance Evaluation in the Corporate Life Cycle” was co-written by Yu-Chin Lin, Yu-Jen Hsiao, Wen-Chi Lo, and Wen-Wen Chen. This study aims to investigate whether a chairman concurrently serving as a general manager, and the proportion of independent directors, affect the corporate governance and the ranking results of the corporate governance evaluation in terms of different corporate life cycles of family business. The results of this study show that both the family business in its mature stage, and the chairman concurrently serving as the general manager in growth stage, have a negative impact in evaluation and ranking of corporate governance. Additionally, it was discovered that the higher proportion the of independent directors in the growth stage, the more positive the ranking of corporate governance evaluation.

The second article, “Traders’ Concentration, Hedging Pressure, and Risk Premium in Futures Markets” was co-written by Chia-Hung Liu, Yu-Lun Chen, Min-Hsi Chung, and Ya-Kai Chang. This study explores the relationship between market concentration and risk premiums in the U.S. futures markets from 2010 to 2018. When studying the determinants of risk premiums in futures markets, existing literature has focused mainly on the risk-averse behavior of hedgers. The research revealed that market concentration does not distinguish between commercial and non-commercial traders, so the largest traders may be classified as either commercial or non-commercial in nature.

The third article, titled “Can Shareholders Benefit from Cash Refund Capital Reduction? The Analysis via the Value of Cash Holdings”, was written by Yu-Lin Huang. This study investigates how the market identifies the managerial implication behind cash refund capital reduction (CR) by exploring the impact of CR decision on the value of additional post-payout cash and on the cash usage after the payouts involved. The results reveal that the impact of CR decisions on the valuation of additional post-payout cash varies regarding both the corporate life cycle stage and a firm’s governance environment. As firms enter an increasingly mature stage of their life cycle, the choices they make about CR are related to a higher market valuation of additional cash after the payouts than the repurchasing decision. However, when firms are at an earlier stage of their evolution, the difference in the cash valuation between CR and repurchasing firms change along with their governance status. The more positive impact of CR decisions in well governed young firms is associated to a greater extent with the efficiency improvement in cash usage.