The effect of controlling shareholders’ excess board seats control on financial restatements: evidence from Taiwan

This study examines the relation between controlling shareholders’ excess board seats control and financial restatements. An analysis of a sample comprising 106 Taiwanese listed firms (53 restating firms vs. 53 non-restating control firms) shows that financial restatements are more likely to occur when there is a greater divergence between controlling shareholders’ board seats control rights and ownership rights. We also find that the excess board seats control of controlling shareholders is positively associated with the materiality and pervasiveness of financial restatements. Overall, these results suggest that the entrenchment incentive from controlling shareholders’ excess control motivates firms to adopt aggressive accounting policies.

Corporate Governance,Product Market Competition,and the Wealth Effect of R&D Spending Changes

This article examines whether corporate governance and product market competition interact to affect the profitability of corporate research and development (R&D) investments. Firms announcing R&D spending changes experience positive and significant wealth effects, and these effects are mainly driven by good‐governance firms. Investors appear to view announcements of R&D spending changes undertaken by firms with stronger shareholder rights as evidence of value creation. Moreover, the favorable wealth effects are stronger for good‐governance firms in noncompetitive industries than in competitive industries, supporting the argument that good governance substitutes for product market competition.     

The relationship between stock price index and exchange rate in Asian markets: A quantile regression approach

This paper uses the data of six Asian countries to estimate the relationship between stock price index and exchange rate. According to the portfolio balance effect, these two variables should be negatively related. However, since the evidence from traditional ordinary least squares estimation is not favorable, the quantile regression model is adopted to observe the various relationships between stock and foreign exchange markets. The results show an interesting pattern in the relation of these two markets in Asia, which indicates that the negative relation between stock and foreign exchange markets is more obvious when exchange rates are extremely high or low.     

On delineating supply chain cash flow under collectionrisk

The credit terms for accounts receivable (AR) offered by sellers to buyers not only create a time lag between supply chain physical flow and cash flow, but also increase the collection risk contributed by late collection and default. Previous studies describing the relationship between the two major supply chain flows did not consider the collection risk, which poses a serious challenge to companies with limited cash resources when seeking growth opportunities in sales. This study first delineates the relationship between the two flows during a growth period without imposing any constraints. A stochastic optimization model is then developed to observe the managerial implications of cash flow risk under tight cash constraints.     

An empirical test of stakeholder influence strategy models: evidence from business downsizing in Taiwan

Frooman's model of stakeholder influence strategies uses levels of resource dependence to determine the power of stakeholder influence. Our study provides initial empirical tests of his model applied in business downsizing. Data from 18 recently downsized firms in Taiwan, including nine multinational corporations (MNCs), were plotted against the Frooman model. We found that resource-dependence alone as Frooman theorized could not explain the influence strategies that stakeholders (in this case the employees) took in response to firms' downsizing decisions. Further investigation revealed that the institutional factors had a significant effect on how firms structured their downsizing initiatives and hence changed the way the employees reacted to firm decisions. We proposed a new model using both resource-dependence and institutional legitimacy as determinants of stakeholder influence strategy and suggested relationships between these determinants and stakeholder actions. This proposed model has profound research implications for the strategic stakeholder theory, as well as practical implications for human resource management.     

Optimal diversification,bank value maximization and default probability

This study argues that the optimal level of diversification for the maximization of bank value is asymmetrical and depends on the business cycle. During times of expansion, systematic risks are relatively low; hence, the effect of raising systematic risks from portfolio diversification is slight. Consequently, the benefit of reducing individual risks dominates any loss from raising systematic risks, leading to a higher value for a bank by holding a diversified portfolio of assets. On the contrary, during times of recession, systematic risks are relatively high. It is more likely that the loss from raising systematic risks surpasses the benefit of reducing individual risks from portfolio diversification. Consequently, more diversification leads to lower bank values. Finally, some empirical evidence from the banks in Taiwan is provided.     

Classification and competition analysis of air cargo logistics providers: The case of Taiwan’s high-technology industry

This paper classifies air cargo logistics providers allowing analysis of high-technology manufacturers’ choices of providers. Data are collected from high-technology manufacturers in Taiwan’s science parks. Forwarder providers are put into three categories and nested logit model are applied to explore what service performance factors influence high-technology manufacturers when selecting third party logistics providers. Delivery is found to be the most important factor. It is found, for example, that two express providers with high levels of customer satisfaction and market share could compete more effectively by exercising differential strategies.     

The dark side of logistics outsourcing - Unraveling the potential risks leading to failed relationships

We identify and empirically examine the potential risk factors and their structural relationships that can cause a logistics outsourcing relationship to fail. Specifically, we investigate how the relationship risk as perceived by apparel wholesalers as user firms influence their evaluation on the asset and competence entrusted with their logistics service providers, which are logistics outsourcing risk factors considered important by the former in determining continued relationships with the latter. The results highlight the need for relationship management by user firms to mitigate the risks in asset and competence specifically invested in logistics service providers for their outsourced activities.     

R&D Productivity and the Spillover Effects of High‐tech Industry on the Traditional Manufacturing Sector: The Case of Taiwan

This study sets out to estimate the impact of R&D on productivity within the private sector, with further analysis of the different impacts of R&D within high‐tech and traditional manufacturing firms. We also attempt to examine the spillover effects from R&D investment in the high‐tech sector on productivity growth within the traditional industries. Using a sample of 136 large manufacturing firms during the period 1994–2000, we develop an extended version of the Cobb‐Douglas production function model, and our findings suggest that Taiwan's R&D investment had a significant impact on firm productivity growth, with output elasticity standing at around 0.18. When the sample is divided into high‐tech and traditional firms, the R&D output elasticity in high‐tech firms is significantly greater than that found in traditional firms. In addition, the average rate of return in high‐tech firms is much greater than that estimated for other industries. Besides, our empirical results show that, although significant, the impact of R&D investment from the high‐tech sector, on the productivity growth of traditional firms, is rather limited.     

Using scientific detective videos to support the design of technology learning activities

This article examines the effect of scientific detective video as a vehicle to support the design of technology activities by technology teachers. Ten graduate students, including current and future technology teachers, participated in a required technology graduate course that used scientific detective videos as a pedagogical tool to motivate their interest in science and technology and to reinforce creative competence in designing technology learning activities (TLAs). The participants watched three scientific detective videos and analyzed them for scientific principles and technologies. An analysis report and interview were conducted to collect participants’ understanding and application of scientific principles and technologies. The main findings were that (a) influencing teacher’s design of TLAs through scientific detective videos is feasible; (b) prior personal conditions and external factors influence teacher’s design of TLAs; and (c) the analysis of scientific detective videos helps teachers to design TLAs appropriately. This study demonstrated the broad utility of scientific detective videos for inspiring technology teachers to integrate science and technology in their activity design.