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Corporate social responsibility (CSR) is a subject that has garnered considerable attention in recent years. This study conducts the empirical study by using a real options perspective to examine whether a company's CSR commitment tends to increase its market value. According to Taiwan's CommonWealth Magazine, this study distinguishes CSR and non-CSR companies. The paper estimates and compares the real options values of CSR and non-CSR companies and shows that high percentage of the company value is attributed to real options. This study finds that a company's commitment to fulfilling its social responsibility increases its real options value and that the higher the number of CSR Awards won by a company, the higher its real options value. Compared with 10 years ago, investors now pay more attention to companies' CSR performance. In addition, the higher a company's size, systematic risk, fixed asset ratio, debt ratio, or skewness in stock returns, the higher a real options value is likely to be. [ABSTRACT FROM AUTHOR]

This paper uses Risk-Adjusted Return on Capital (RAROC) to assess the performance of 14 financial holding companies (FHCs) in Taiwan. RAROC value indicates a firm's performance after considering the market risk effect, and gives a better measurement of the firm's operational productivity than traditional methods. We use the full valuation methods to calculate Value at Risk (VaR) as the market risk measurement for economic capital. According to the New Basel Capital Accord, the market risk of Internal Model should be adjusted, and the Bank for International Settlement suggests using the backtest to select the best full valuation method for estimating adjusted VaR. Therefore, this paper evaluates the best market risk model, and assesses and compares the performance for each firm before and after its merger and acquisition into the FHC. Overall, we find weak evidence that the performance of 14 FHCs increased over time. [ABSTRACT FROM AUTHOR]

This paper examines the risk-relevance of the Basel capital regulations in Taiwan. We investigate (1) whether the regulatory information can explain bank risk, (2) whether the new 1998 version provides incremental information to assess bank risk, given the old 1992 version, and (3) which regulatory version is more useful in assessing bank risk. This paper employs an option pricing methodology to calculate implied asset risk as a proxy for total risk. We find that the Basel capital ratio and its components help explain risk and that the components under the new version have incremental explanatory power over those under the old. Additionally, the new version has greater information regarding risk than the old. Finally, two risk dimensions categorized by supervisors, credit risk and market risk have different explanatory power. Regulatory information about credit risk has explanatory power, but market risk does not. It implies that the Basel accord, contrary to expectation, does not fully capture all risk. Overall, this study contributes to capturing the risk-relevance of the ongoing evolution of the Basel capital regulations in an emerging market economy. [ABSTRACT FROM AUTHOR]

This paper examines the impact of knowledge protection, knowledge ambiguity, and relational capital on alliance performance of 95 Taiwan-based companies. The results show that knowledge protection exerts significant positive effect on knowledge ambiguity and relational capital and relational capital mediates the relationship between knowledge ambiguity and alliance performance. This paper concludes with a discussion of the implications and limitations of the research. Copyright © 2007 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

This paper extends the Blanchard model of a closed-economy to a three-good (exportable, importable and non-tradable goods) open-economy model with capital accumulation and uncertain lifetimes to study the impacts of terms of trade shocks on the current account. The simulation results show that a model with uncertain lifetimes is more appropriate to describe a small open economy like Taiwan at the steady-state equilibrium than a model with infinite lifetimes. We find that the Harberger-Laursen-Metzler effect is discernible for temporary or permanent terms of trade shocks. Furthermore, the steady state is a saddle point and the speed of convergence of capital and consumption is quite low. [ABSTRACT FROM AUTHOR]

Since 2008, the Taiwanese business group Want Want, having made a fortune in China, has returned to Taiwan to buy a major media group and attempt to exert political influence on Taiwanese society. This paper analyses the rise and rationale of this new type of media investor in the light of the business-government relationship under China's model of state capitalism. According to the analysis developed in this paper, when China needed foreign investment in the early 1990s, Taiwanese investors were warmly welcomed by the Chinese government, which provided Taiwanese businesses with tax incentives at that time. After 2000, however, when not only domestic Chinese entrepreneurs emerged but also more non-Chinese investors entered the Chinese markets, Taiwanese businesses realised that the investment environment had become much more competitive, so they had to work hard on building ties with Chinese officials. Under these circumstances, Want Want bought into media in Taiwan as an asset to be used in order to build social ties with the Chinese government, but in doing so, Want Want has also triggered resistance from Taiwanese civil society. Future researchers and regulators can continue to watch and define this new type of investment, which has become increasingly significant in this region. [ABSTRACT FROM AUTHOR]

Purpose -- The purpose of this paper is to compare the capital system and governance of Mainland Chain with that of Taiwan. Design/methodology/approach -- This a comparative study drawing upon the main principles of the legal systems of China and Taiwan. Findings -- Due to historical, institutional social factors, the capital system of the Mainland China differs greatly from that of Taiwan. There is room for both sides across the Taiwan Straits to learn from each other by taking into consideration the respective features and deficiencies of their regulations. Originality/value -- The comparison and contrast study of the two capital systems helps them to improve respectively and boost economic development as well as legal construction. [ABSTRACT FROM AUTHOR]

The original genuine savings (GS) model started from a concern mainly with unchanged capital: if the stocks of all forms of capital decline through time, welfare will decline, too, eventually leading to unsustainability. In other words, negative GS rates indicate unsustainability. In the context of sustainable development evaluation, however, income distribution and change of per capita welfare are two significant dimensions that the GS model has totally ignored and that need to be aptly incorporated into the model. This is because, behind a positive GS ratio, a country still faces other factors such as current income inequality and population growth, which may undermine the enjoyable sustainable welfare. This paper therefore adjusts the GS framework for these reflections and tests its application to the United Kingdom and Taiwan between 1970 and 1998. Our result shows that the United Kingdom has more depressed GS rates and more eminent sustainable welfare loss than Taiwan over the years. This result has been accordant with some prior research claims: many resource-rich countries have achieved slow or no long-term improvements in their standards of living. Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment. [ABSTRACT FROM AUTHOR]

Innovation capital are typically expensed and/or unrecognized as assets under current generally accepted accounting principles. This results in accounting-related information asymmetry. This paper examines the association of innovation capital (as measured here by the proxies of R&D expenditures and granted patents) and initial public offerings (IPO) anomalies. These anomalies include initial IPO underpricing, duration of honeymoon (a distinct feature of the Taiwanese IPO environment), and long-term performance. The theoretical model underlying this research is a signaling model. The results indicate that more innovative firms are more likely to be underpriced, and have longer honeymoon periods than less innovative firms. Further, the more innovative firms have positive and growing long-term market-adjusted returns. This stands in contrast to the declining long-term stock performance of initial public offering firms that is evidenced in the literature. We conclude that pre-IPO research and development expenditures disclosed in the IPO prospectus, official monthly reports of newly developed patents released to the public, and the frequency of patent citations significantly signal both underpricing and future market performance of IPO firms in Taiwan. [ABSTRACT FROM AUTHOR]

This study aims to determine whether companies with surpluses are more capable of maintaining their dividend rate if they issue cash dividends from capital reserves. Further, it considers whether such issuance would suppress their earnings management. This study presents evidence from Taiwan, which acts as the global leader in terms of setting a precedent for allowing companies with surpluses to issue cash dividends from capital reserves. The empirical results show that (1) when the company pays cash dividends with capital reserves, the cash dividends can be maintained at a certain level, and (2) when the ratio of capital reserves to cash dividends is high, the accrual-based earnings management is low. The results obtained in this study are in line with that of previous studies and are expected to help other nations to consider making better use of capital reserves. [ABSTRACT FROM AUTHOR]

This paper analyzes the relationship, from 2000 to 2009, between corporate governance, innovation capital, and management performance in Taiwanese companies containing research and development (R & D) departments. For the analysis, panel data regression was used, which incorporated the random effect, while two-stage regressions were used to test the relationship. As is known, innovation capital is related to management performance and has a deferral effect. In this study, a new variable was chosen to express the concept of innovation capital and take advantage of the instrument variables of corporate governance, thereby supporting our hypothesis. Similar results are also obtained using a two-stage regression, which also incorporated the instrument variables of corporate governance. The results demonstrate that innovation capital has different outcomes, especially because independent directors have an influence on both innovation capital and management performance. Thus, through cross-sectional analysis, we suggest a new variable to estimate market performance, with measures of structural capital requiring redesign. Organizational capital was also found to have an influence on performance. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this study is to find evidence of the impact of intellectual capital on firm value, and, in turn, enhance the existing literature which lacks consensus on it. By employing some distinctive proxies for human capital, innovation capital, customer capital and process capital, this study might provide valuable information for firms to make strategic decisions. Design/methodology/approach: This study uses Tobin's Q to represent firm value and various variables to be the proxies for intellectual capitals. By utilizing firm-year observations, this study applies panel data models first, and then Petersen regression models for further investigation to enhance the robustness of the empirical results. Findings: Firm value is affected positively by the average net profit per employee as well as goodwill and intangible assets. This is because firms having employees with abundant knowledge will possess advantage for innovation, and the excellent reputation, a part of goodwill for oriental firms, would encourage people to consume and invest more. Research limitations/implications: The constraint of data resource is the main limitation. With the limited scales and as an emerging market of Taiwan Stock Exchange, it is not confirmed whether the results are appropriate for the developed markets. Nevertheless, firms should make efforts on developing intellectual capital and corporate governance for operating businesses with competitiveness and safety. Originality/value: Since capable employees enhance the innovation, innovation improves customer's satisfaction and good customer relationship increases the sales; this study illustrates that for expanding businesses, firms should make more efforts on developing intellectual capital. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this study is to explore the moderating role of information technology (IT) practices in the increase of organizational capacity for generating innovation performance from its relational (internal and external) capital and trust capital. Design/methodology/approach: Survey data has been collected from 102 publicly listed enterprises in Taiwan and is analysed by using symmetric structural equation modelling–partial least squares (SEM–PLS) and asymmetric fuzzy set qualitative comparative analysis (fsQCA) techniques. Findings: The findings derived from SEM–PLS show that internal relationships and trust embedded in firms' relationships play a significant role in the innovation performance of Taiwanese enterprises, and reveal a more closed approach to innovation. The results also confirm the important role of IT advancement in amplifying the effect of internal and external relationships and trust formation on innovation performance. One more interesting note, the integration of fsQCA demonstrates several configurations that lead to superior innovation performance. Research limitations/implications: The study was limited to Taiwanese companies with at least 200 employees. It might well be that the economically significant small business sector has distinct relationships with stakeholders, trust building strategies and IT practices, and that innovation performance depends on other macroeconomic effects. This study combines symmetric (SEM–PLS) and asymmetric (fsQCA) techniques to improve our understanding of the complementarities between relational and trust capital, and IT practices, and identify configurations that could yield organizational benefits for innovation outcomes. Practical implications: This study provides new knowledge about IT utilization in the workplace which practitioners may use to capitalize on internal and external networks and enhance innovation performance. Originality/value: Exploring together intellectual capital (IC) components and IT practices, this study merges IC and knowledge management (KM) streams of literature and adds to the prominent discussion on how IC and technology-based KM together contribute to superior innovation performance. In introducing the notion of equifinality, and testing our hypothesis by applying fsQCA, we also provide new ground for methodological discussions in the field of innovation performance. [ABSTRACT FROM AUTHOR]

In this study, we set out to investigate the potential relationships between plant growth and size, age and human capital using a unique employer-employee matched data set for the Taiwanese manufacturing industry from 1998 to 2005. The general assumption of a reduction in plant growth with increases in plant size and plant age is confirmed by our manufacturing industry data set, while plant growth increases with the stock of human capital, albeit at a diminishing rate, thereby implying a positive concave relationship between plant growth and human capital. Moreover, we find that for plants with higher levels of human capital, the reduction in plant growth is more moderate with regard to size than with regard to age, indicating that differences in the stock of human capital within plants will tend to lead to differences in the patterns of age and size impacts on such plants' growth. Finally, substantial differences were observed among the influences of the various characteristics on plants with high, moderate and low growth in size. [ABSTRACT FROM AUTHOR]

In response to the prevalent deployment of teams in organizations, there is a need to jointly consider conflict and social capital within the teams to offer novel ways to understand group process. This study proposes that the association between intragroup conflict and group social capital may be dynamic and reciprocal. Specifically, this study investigates longitudinally how intragroup conflict influences group social capital within cross-functional teams and recognizes whether the teams with high group social capital can further produce intragroup conflict. The two-year longitudinal study sampled 527 individuals in 90 teams across two time periods. This study finds that when teams are formed (Time 1), task conflict relates positively to structural social capital, and relationship conflict relates negatively to cognitive social capital. There is an inverted U-type relationship between task conflict at Time 1 and social capital at Time 2. Established teams (Time 2) with higher levels of social capital experience higher levels of task conflict and lower levels of relationship conflict than teams with lower levels of social capital. Copyright © 2016 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

Despite the fact that the association between business greening and its competitiveness has been confirmed, the effects of green IT capital on the relationship between business greening and competitiveness have largely not been investigated by researchers. To address this gap in the research, this study aims to introduce and define the new concept of green IT capital to bridge the gap for business greening. The results of a sample survey of 148 companies from the top 1,000 manufacturers in Taiwan confirmed that the degree of business greening has significant positive effects on business investment in green IT human capital, green IT structural capital, and green IT relational capital as well as business competitiveness. In addition, the three dimensions of green IT capital positively relate to business competitiveness. In mediating effect, green IT relational capital partially mediates the links between the degree of business greening and business competitiveness. [ABSTRACT FROM AUTHOR]

Construction firms require a large cash flow, thereby creating a significant financial leverage. Therefore, identifying a highly effective cost efficiency model is essential for construction firms, especially under the pressure of competition in today’s global market. This research used stochastic frontier analysis (SFA) to model and measure the cost efficiency of construction firms in Taiwan, and to investigate the relationships between input resources and cost efficiency. The main findings include: (1) subcontracting reduces labour capacity; (2) larger firms can be more cost efficient; (3) appropriate financial leverage increases cost efficiency and capital; and (4) reducing equipment costs increases cost efficiency. These findings can help construction firms to strategically adjust the management of their firm and improve cost efficiency. [ABSTRACT FROM AUTHOR]

This work develops a theory of countercyclical bank mergers and finds supported empirical evidence in Taiwan. Procyclical (countercyclical) mergers tend to involve higher (lower) measures of merger activities during economic booms than downturns. Several previous studies suggest that bank mergers are procyclical in developed countries, possibly driven by the higher capital liquidity that accompanies an economic expansion. Alternatively, this work emphasizes the role of economic situation and the government in bank mergers. Our results suggest that the depressed industrial situation, which leads to severe competitive market and impoverished revenue basis, drives banks to increase their market share for reducing competition through merger with the merger cost as low as possible by utilizing government's offering and the beneficial condition of stock market. Merger activities may be explained by the motivation of generating higher profit and able to survive, whereas the banks with insufficient competitiveness are more likely to suffer serious loss and thus forced to be merged. [ABSTRACT FROM PUBLISHER]

Using daily data from between 1993 and 2003, covered interest differential and cointegration tests are applied to examine short-run and long-run international capital mobility for Japan, Singapore and Taiwan, and, for comparison purposes, the UK. Despite the high short-run mobility in Japan (Singapore and Taiwan), being slightly (significantly) lower than in the UK, perfect long-run mobility exists in all three Asian economies, especially when the Asian currency crisis is excluded. Different short-run and long-run mobility implies the existence of a response lag in the financial market. As expected, although the impulse response reaches the significant long-run equilibrium level shortly after the shock in the UK, lagged responses appear in the three Asian economies, particularly in Singapore and Taiwan. [ABSTRACT FROM AUTHOR]

Using the Solow–Swan growth model and the time‐trend included in the aggregate production function, this study applies the multivariate cointegration approach to re-investigate the long-run and causal relationships between defence expenditures and GDP while controlling for capital and labour input in Taiwan during the 1955–2002 period. It examines the long-run causal relationship using the weak exogeneity test and utilizes general impulse response functions to determine whether a shock to defence expenditures affects economic growth or vice versa. Our findings provide substantive evidence in favour of the existence of a long-run equilibrium cointegrated relationship between defence expenditures, GDP, labour and capital stock. The results of the weak exogeneity test indicate that a bi-directional causal relationship exists in the long-run between defence expenditures and GDP. Thus, the main policy implication that emerges from the long-run results is that increasing defence expenditures in Taiwan is an effective means to boost overall economic performance and, with this improved economy, it should then be able to increase its defence expenditures further. Lastly, from our dynamic vector error correction model estimations, it is found that defence expenditures are a major means of adjusting for disequilibria that occur within the system. [ABSTRACT FROM AUTHOR]

Convertible bond (CB) issuers have been required to include financial forecasts in prospectuses filed with the Taiwan Securities and Futures Commission (TSFC) since 1991. This study examines the association between CB issuance terms and the extent of optimistic initial earnings forecasts and earnings management, as well as the association between CB issuance terms and the extent of reported (post-managed) earnings forecasts. Empirical results indicate that: (1) the likelihood of the issuing company making an optimistic initial earnings forecast (positive initial forecast error) increases with conversion price, issuance amount, and issuance period, but decreases with an increasing conversion period and reselling premium; (2) earnings management was pervasive in the year of issue of the CB; and (3) a substitutive relation exists between earnings management and issuance terms in CB issuing. [ABSTRACT FROM AUTHOR]

Various discourses and debates on the state - transnational capital relationship have emerged within the international political economy literature. The particular contribution offered here focuses on this relationship in three East Asian developmental states (Singapore, South Korea and Taiwan - the NIE-3) through the lens of foreign economic policy (FEP) analysis. In different ways their respective state governments have all worked closely alongside various forms of transnational capital in sustained yet evolving 'adaptive partnerships', and in accordance to largely state-determined FEP objectives. Moreover, these objectives broadly relate to the pursuit of economic security in the international system. While each of the NIE-3's own path of economic development has differed significantly, there nevertheless exist important similarities. This not just relates to being constituent to the East Asian regional economic dynamic but also their shared developmental state tradition. The relationship between the state and transnational capital is also key to understanding the NIE-3's foreign economic policy formation, although this has differed significantly across the group. In sum, this study analyses just one of many contemporary examples where both the state and transnational capital are working to congruent ends in their respective adaptations to the challenges posed by globalization. [ABSTRACT FROM AUTHOR]

On the island of Taiwan there appear to be numerous mutual savings and loan clubs of a type that may be peculiar to this part of the world. Each club is organized to pool savings and make loans to its members over a definite period of a few months, after which the club automatically goes out of existence. There is no regulation or supervision and probably no one club affects more than a few people. In the aggregate, however, they are sufficiently important for them to be taken into account in sample census surveys of family income and expenditures. Some salient features of a Chinese mutual savings and loan club are as follows: the organizer usually obtains a loan interest free. In some cases he may offer to accept a discounted sum of money as an inducement to get prospective members to join the club, each member of the club makes a withdrawal of capital at one and only one monthly meeting, when a member submits a successful bid and makes a withdrawal of capital front the club's funds, his withdrawal is discounted by an amount equal to the product of the amount bid and the number of other members eligible to bid.