How does Bank Capital Affect Bank Profitability and Risk? Evidence from China's WTO Accession

This paper examines how bank capital affects bank profitability and risk in China, and how its impact differed before and after the nation entered the WTO. Our study uses the dynamic generalized method of moments approach with a panel database containing 171 Chinese commercial banks. We find that bank capital has significant influence on bank profitability and risk, but its impact has declined since China joined the WTO in 2001. For different sized groups, the impact of capital on profitability exhibits a distinct trend. The effects of capital on bank risk are different for large and small banks depending on the risk variables used for the Chinese banking industry.     

What should we call this color? The influence of color-naming on consumers' attitude toward the product

Many companies use unique color names to differentiate products, attract consumer attention, and promote sales. This study categorizes the names of colors in detail, and uses schema incongruity and affect regulation theory to elucidate the effects of color names with different typicality and ambiguity. We identify the underlying mechanism and explore how color attribute importance and color name valence moderate the effects of the color name. The results of five studies show the following: (a) atypical-low ambiguity color names (vs. atypical-high ambiguity and typical color names) create a more favorable consumer attitude toward the product; (b) when color is the primary attribute of the product, typical color names are more effective; when color is a secondary attribute, atypical color names yield more favorable effects; (c) for positively-valenced color names, an atypical-low ambiguity naming method yields a better response, while for negatively-valenced color names, an atypical-high ambiguity naming method yields a more favorable response; and (d) the color-naming effects are mediated by perceived product uniqueness or playfulness, depending on different conditions.     

R&D EFFICIENCY AND THE NATIONAL INNOVATION SYSTEM: AN INTERNATIONAL COMPARISON USING THE DISTANCE FUNCTION APPROACH

This paper applies the distance function approach for stochastic frontier analysis (SFA) to compare research and development (R&D) efficiency across 24 nations during 1998–2005. In this multiple input–output framework, R&D expenditure stock and R&D manpower were inputs, while patents, scientific journal articles, and royalties and licensing fees (RLF) were outputs. Intellectual property rights protection, technological cooperation among business sectors, knowledge transfer between business sectors and higher education institutions, agglomeration of R&D facilities, and involvement of the government sector in R&D activities significantly improve national R&D efficiency.     

Defense conversion into a global system of proprietary technologies: The case of Taiwan''s aircraft industry

To further industrial development, Taiwan's government has officially targeted the aircraft industry, specifically the Aero Industry Development Center (AIDC)—producer of Taiwan's combat aircraft with a two-and-a-half-decade history. However, despite AIDC's experience in aerodynamics, structure, and engines, redirecting its engineering and production capabilities for commercial jets poses many difficulties. Because military and civilian needs of aircraft design are very different, the commercial benefits of military work on airframes are minimal. In contract manufacturing, one critical factor is efficiency, but AIDC is still relatively weak in scale economies, scope economies, and experience curve. Another critical factor is technology, but most functional and design specifications and standards are imposed by the upper-tier buyers and the integrators. Moreover, neither spin-off nor dual-use strategy can apply effectively, leaving AIDC an enclave isolated from local industry. Overall, the prospect of AIDC's defense conversion is dismal. The military does not have the capability to endorse the transformation; the civilian government is not familiar with the commercial practices; the local firms are not interested in entering this industry; the commercial businesses are largely controlled by the world leading integrators; and, most important, AIDC's core competence is fairly weak. The case typifies a government's futile efforts in a global industry of complex proprietary technological systems.     

The impact on the cultural diversity to employees' job satisfaction between mainland China and Taiwan: a comparison of Taiwanese invested companies

This study explores how the Chinese values (Integrations, Confucian Work Dynamism, Human-heartedness and Moral Discipline) impact employees' satisfaction (ES). Employees who work in mainland China for companies whose parent companies are based in Taiwan were surveyed. The results can be summarized as the following: ‘Integration’, ‘Confucian Work Dynamism’ and ‘Human-heartedness’ are significantly different between Taiwanese and Chinese employees, while ‘Moral discipline’ is not; Taiwanese employees have higher ES than Chinese employees; Taiwanese employees view ‘career planning’ is the most important, while Chinese employees think ‘management system’ is most important; For Taiwanese employees, ‘Salary and benefit’, ‘Working load’ and ‘Management system’ have effects on ES; Age and Education have effects on Chinese employees.     

Pricing Weather Insurance with a Random Strike Price: The Ontario Ice-Wine Harvest

Weather insurance within the agricultural sector has been limited by the difficulty in defining the appropriate weather event and in pricing the product. We develop a new pricing method for weather insurance under situations where returns depend not only on the occurrence of the weather event, but also its timing. The method is used to price weather insurance for ice wine. Because the harvest quantity of grapes for ice wine degrades over time, the strike value on the weather event measured as harvestable hours is random. We develop a Monte Carlo method to estimate the premium.     

The Impact of Taiwan's WTO Entry on Its Domestic Agriculture Sector

This study used a multi-sector CGE model, derived from ORANI and implemented by the GEMPACK software, to evaluate the impact of 44.67%, 35.9% and 40.8% tariff reductions on agriculture, livestock, and fishery, respectively, two years after Taiwan's accession to the WTO in 2002. Results show that the value of domestic agricultural, livestock and fishery production would be reduced by NT$45.2, 24.1 and 3.9 billion, respectively, under the standard neo-classical model. Since it is difficult for industrial sectors to hire the unskilled elderly workers who lost their jobs in the agricultural, livestock, and fishery production sectors, a partial equilibrium model, specified in this study by restricting transferability of primary input from agriculture, livestock, fishery, and processing sectors to the secondary industrial sectors, will be more realistic for Taiwan's social-economic structure after entering WTO. The results from the structuralist model show that the value of domestic agricultural, livestock, and fishery production will ber-educed by NT$47.4, 26.4 and 4.4 billion, respectively, suggesting that those sectors in Taiwan would suffer more severely if their primary input (i.e. labor) lacked mobility.     

A study to identify the training needs of life insurance sales representatives in Taiwan using the Delphi approach

This article reports a study conducted to identify the needs for continuing professional development for life insurance sales representatives and to examine the competencies needed by those sales representatives. A modified Delphi technique was used. Most life insurance companies in the USA implement an education and training plan advocated by the Life Office Management Association. Insurance companies in Taiwan implement similar education and training plans, but they do not seem to result in the successful performance of their sales representatives. Besides augmenting knowledge of various financial products and marketing approaches, this study also suggests that life insurance companies need to train their sales representatives to an adequate standard in competencies of problem solving, communication, information technology utilization, culture compatibility, emotional intelligence, collective competence and ethics.     

A note on board characteristics,ownership structure and default risk in Taiwan

This study applies dynamic generalized method of moments estimation to examine the influences of ownership structure and board characteristics on default risk for a full samples and two subsamples (high‐tech and conventional) of publicly listed firms in Taiwan. Our findings reveal that certain characteristics of corporate governance have explanatory power for default probability, but the impact is not straightforward. In particular, the impact of internal and external governance structures on default risk is industry dependent. Accordingly, governance proposals that encourage higher ownership among directors and large block shareholdings in high‐tech firms or reduce managerial ownership in conventional companies can have a counterproductive effect on corporate governance and result in higher bankruptcy possibility.