An Investigation on the Relationship between Efficiency Monitoring and Interest Violation under Interest Assimilation

摘要

In this study, the listed electronic companies in Taiwan, from 2005 to 2010, were regarded as the research objects to investigate the relationship between efficiency monitoring and interest violation. The empirical results showed that monitoring creditors' right is effective external monitoring power, and through compensation, directors, supervisors, and managers cozy up to one another, which causes interest assimilation. Therefore, it is suggested that a company should appropriately raise the debt ratio in order to increase the external monitoring function, and there should be a certain proportional limit for the controlling shareholders to serve as directors or supervisors in order to avoid excessive interest assimilation which further violates the interests of the minority shareholders.