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CEO Tenure in Taiwanese Family and Nonfamily Firms: An Agency Theory Perspective


  • This research was partially supported by the National Science Council of the Republic of China under Grant NSC92-2416-H-008-022.

Wen-Hsien Tsai, Department of Business Administration, National Central University, Jhongli, Taiwan 320, ROC; tel: 886-3-4250860; fax: 886-3-4222891;

Jung-Hua Hung, Department of Business Administration, National Central University, Jhongli, Taiwan, ROC.

Yi-Chen Kuo, Department of Business Administration, St. John's & St. Mary's Institute of Technology, Tamsui, Taiwan, ROC.

Lopin Kuo, Department of International Trade, Van Nung Institute of Technology, Jhongli, Taiwan, ROC.


This study investigated the tenure of CEOs in a sample of 304 listed companies in Taiwan; 63 firms were family controlled, 241 were not. The results show that CEO turnover is significantly lower in family firms and its relationship to corporate performance is negative. CEO ownership and board ownership are not significant in explaining the length of family CEO tenure. These findings imply that family boards can still effectively replace the CEO despite relatively low ownership. From the ownership structure perspective, this study suggested that the agency theory is applicable for nonfamily firms in Taiwan, but unsuitable for family firms.