African Journal of
Business Management

  • Abbreviation: Afr. J. Bus. Manage.
  • Language: English
  • ISSN: 1993-8233
  • DOI: 10.5897/AJBM
  • Start Year: 2007
  • Published Articles: 4131

Full Length Research Paper

Momentum strategy and board size: Evidence from Taiwan Stock Exchange (TWSE)

Keng-Hsin Lo and Shiaw-En Ju*
Business Administration Department, National Central University, Taiwan, R. O. C.  
Email: [email protected], [email protected]

  •  Accepted: 27 July 2011
  •  Published: 30 September 2013


This paper establishes a link between momentum profitability and board size. We use stocks listed on the Taiwan Stock Exchange (TWSE) to show that momentum profits are derived mainly from firms with small and medium board size, but it is nonexistent among large board size firms. The momentum profitability across small and medium board size firms does not represent for system risk based on the Fama-French three-factor model. After controlling by firm size, book-to-market value, our findings are still robust. This board size effect on momentum profits may be due to group decision process and an incentive to engage in risk-reduction activities for more powerful chief executive officers (CEOs).


Key words: Momentum strategy, board size, corporate governance.