• The Growth of SMEs in Taiwan and the Structure of the Boards of Directors: Growth Rhythm as a Moderator

Abstract

Small and medium-enterprises (SMEs) have played an important role in Taiwan’s economic development. Many SMEs actively adopt diversification and internationalization strategies to pursue sustainable growth and operational complexity as well as to respond to information-processing demands. Based on informationprocessing theory and using longitudinal data from 235 small and medium-sized publicly listed companies in Taiwan over a period of seven years from 2005 and 2011, we develop several hypotheses regarding the relationship between growth and the structure of the board of directors. The results indicate that firms in which the structure of the board of directors exhibits a high degree of growth are more likely to reveal (1) great heterogeneity, (2) CEO duality, and (3) high CEO shareholding. Moreover, we find that an irregular growth pattern will strengthen the positive relationship between business growth and CEO duality as well as the positive relationship between business growth and CEO shareholding.

Keywords: Small-Medium Enterprises, Information Processing Demands, Boards of Directors, Growth