Proxy Rule, Pecuniary Value, and Proxy Solicitation: Evidence from TSE-Listed Firms (1984-2002)
Yen, Gili, Atlantic Economic Journal
In recent years, there has been a growing interest in corporate control issues. Nonetheless, laws governing mergers and inter-firm tender offers were not promulgated until January 2002 in Taiwan. The proxy contest still remains the predominant mechanism for obtaining corporate control and, hence, constructs the focus of the present study. (For an earlier study on proxy contests in Taiwan, see Wei-chao Huang and Gili Yen , Managerial and Decision Economics).
Four major changes in proxy rules affect firms listed on the Taiwan Security Exchange from 1984 (the year of promulgation) to 2002 (the year of the latest amendment). Accordingly, the following alternative hypothesis are established: with the exception of the third amendment made on December 17, 1996, the major points of the other three amendments aimed at raising the threshold of minimal shareholdings, lengthening the minimal shareholding period, reducing the number of shares to be represented, or making it more costly to send out the proxy materials. Therefore, it is expected that the occurrence of proxy contests will become smaller in the post-amendment period which begins one day immediately after the amendment in question and ends one day earlier than the next amendment. …