Abstract
This study examines the changes in the systematic risk of firms listed in the Taiwan stock market following the initial establishment of audit committees. While the results show that the changes in systematic risk are insignificant for the overall sample of firms, I do find that corporate governance influences the changes in systematic risk for the low-growth firms. Specifically, the low-growth firms with lower insider shareholdings, with a pyramidal ownership structure, not controlled by a family, or audited by one of the Big 4 accounting firms tend to enjoy the benefits of experiencing a decline in systematic risk following the establishment of the audit committee.
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