Leverage, performance and capital adequacy ratio in Taiwan's banking industry

We examine the relation between firms’ financial structures and their risky investment strategies in Taiwan's banking industry. Regressions cover two subperiods: before the first financial reform (1996–2000) and after the first financial reform (2001–2006), to address the impacts of the first financial reform on banking firms’ financial structures. Our first result demonstrates that the restrictions on CAR have indeed affected firms’ risky investment strategies, as market share and leverage are positively related. Second, the firm performance is significantly and positively related to firm size, leverage and financial cost. Finally, the regression results show that financial structures for banking firms are positively related to the states of business cycle (i.e., cyclical). The positive signs coincide with Proposition 4 in our analytical model.     

Developing physics concepts through hands-on problem solving: a perspective on a technological project design

In a contest featuring hands-on projects, college students were required to design a simple crawling worm using planning, self-monitoring and self-evaluation processes to solve contradictive problems. To enhance the efficiency of problem solving, one needs to practice meta-cognition based on an application of related scientific concepts. The objective of this study, then, was to analyze the physics concepts employed by the students as they completed a hands-on project named “Crawling Worm,” during which they had to overcome problems encountered by the requirements of their design as well as those brought on by competition. Based on the analysis of the participants’ working portfolios and on reviews and interviews by engineering professors, the results of this study show that the crawling worm design competition encouraged the practice of problem solving, and it facilitated the learning of physics concepts such as friction, torque, four bar link, material properties, and so on.     

Structuring critical success factors of airline safety management system using a hybrid model

With the global trend of legal requirement for a performance-based Safety Management System (SMS), to develop and implement an SMS to deliver services has become the most important goal within the airline industry. Yet there found some discrepancies concerning the use and the manner that SMS was being explained and taught. Therefore, this research aims to develop a quantitative evaluation model, which identifies the key components of airline SMS and considers the interaction between key components. To explore the core value of SMS, an extensive review regarding SMS components are firstly conducted and summarized from major aviation organizations and authorities, and then Grey Relational Analysis is used to group and select key components. After the critical components are derived, Decision Making Trial Evaluation Laboratory and Analytic Network Process are employed to analyze and map out all kinds of interactions among critical components and dimensions systematically. An empirical study is presented to illustrate the application of the proposed methods. From the results of the combined approaches, Organization is the most important dimension in SMS, which begins with Policies that convey to all staff the top managers’ vision on safety.     

Convergence to market efficiency of top gainers

This study investigates the convergence process toward efficiency of daily top gainers. The convergence process toward efficiency is much clearer as a result of using a GARCH(1, 1) model compared to the OLS model, and exhibits a monotonic decline as the time interval increases. The relationship between volatility and order imbalances is, however, not strong enough, suggesting that market makers do have the capability to reduce price volatility. This study develops an imbalance-based trading strategy, which earns a positive profit but fails to outperform the buy-and-hold strategy (i.e., open-to-close returns). A nested causality approach, which examines the dynamic return–order imbalance relationship during the price-formation process, confirms the results.     

The MOSUM of squares test for monitoring variance changes

In this paper we propose the MOSUM of squares test for monitoring potential variance changes when new observations arrive. It is shown that the limiting distribution of the proposed test is determined by the increments of the Brownian bridge. Finite-sample simulations examine empirical sizes and average detection delays of the proposed test. We apply the proposed test to study how soon a variance change can be detected for the yen/$ exchange rate and the S&P 500 stock index.     

Shipper behavior to use EC services in liner shipping

The purpose of this paper is to discuss shipper behavior to use electronic commerce (EC) services in liner shipping. Inquiry use intention and transaction use intention were employed to define shipper intention to use the EC services. Based on the internal and external perspectives of shippers, a causal model was constructed to investigate the determinants of the intentions. The internal factor is defined as shippers’ perceived usefulness (PU) of the EC services. The external factors include the EC promotions of shipping companies and the partnership between shippers and shipping companies. From eight major industries in Taiwan, 135 exporting companies were sampled to validate the model. The results indicate that the partnership is the most significant factor affecting the transaction use intention, while the PU of the shipper is the most significant determinant of inquiry use intention. EC promotions only significantly affect transaction use intention. These results may provide useful information for shipping companies seeking to promote their EC services.     

Rezensionen

Ohne Zusammenfassung     

The Employer Size-Wage Differentials in Taiwan

This paper examines the factors affecting wage differentials for firms of different sizes, using Taiwans Manpower Utilization Survey data of 1996. The main findings of the paper are as follows: (a) People with years of education, working experience, degrees in Science, Engineering, and Medicine, as well as females and married people tend to have a greater preference for working in big firms. Workers in public utility companies and manufacturing industries also prefer to work in big firms. While professionals, technicians, and service and sales workers prefer to work in large firms, business executives and managers have a preference for small firms. (b) Small-scale (less than 100 workers) firms tend to have a negative selection, while large-scale (more than 500 workers) firms tend to have a positive selection. That is, under self-selection, more able workers choose to work at large firms and less able workers at small firms.     

Economic fluctuations,volatility changes and the role of government spending in China: A structural analysis

We study the economic fluctuations in China by using a standard neoclassical general equilibrium model to provide a structural analysis. We have carefully constructed measurements for economic variables from Chinese data to be consistent with the literature. We show that the government spending behaviour plays an important role in accounting for the changes in the pattern of both absolute and relative volatilities. Although we find that a general moderation in economic fluctuations after 1978 can be largely explained by the total factor productivity (TFP) process, TFP itself cannot explain the change in the pattern of relative volatilities. We show that policy changes in government spending can account for the relative volatility divergency. Counterfactual experiments are also provided to discover the role of each factor in explaining the economic fluctuations in China.     

The efficiency of earnings forecast pricing

Prior research has suggested that the information content associated with analysts’ forecast revisions is not immediately incorporated into a firm’s stock price. We find that the apparent anomaly is concentrated in low-priced firms that receive favorable earnings revisions. Variables (such as analyst coverage and celebrity status) cannot reliably explain variations in price formations. Finally, we find that the magnitude of the post-forecast revision drift has decreased after 2002. Overall, our results suggest that the analysts’ forecast revisions anomaly can be explained by a combination of random statistical variations and transaction costs.