Socioeconomic Advance in the Republic of China (Taiwan)

A bstract . The significance of economic development in the Republic of China on Taiwan cannot be adequately recognized without a concomitant assessment of the social changes that have taken place over the last 30 years. The concept of social indicators as measures of such changes is explored and their applicability to the island determined. Levels of the quality of life from different periods are studied and their advances analyzed. Taiwan's levels are compared with those of developed countries and of the People's Republic of China (Mainland China). Taiwan's show evidence of remarkable progress. The impacts of energy developments and of the recession's deterioration of foreign trade have threatened the rate as well as the absolute level of this progress.     

Radionuclide esophageal transit test: Detection of esophageal dysmotility and reflux in noncardiac chest pain

Thirty-one patients with substernal chest pain but with normal coronary angiographic findings and 25 normal volunteers were included in our study. Esophageal motility—including esophageal mean transit time (MTT), residual fraction (RF), and retrograde index (RI) of the two groups—were evaluated by the radionuclide esophageal transit test. The results showed that among patients with noncardiac chest pain (NCP), 48% have a longer MTT, 39% have a higher RF, and 58% have a higher RI than normal volunteers. We found that esophageal disorders are a common source of noncardiac chest pain, and that radionuclide esophageal transit test is a simple noninvasive screening method to detect esophageal dysmotility or gastroesophageal reflux in such cases.     

Sinking Funds and the Agency Costs of Corporate Debt

This paper examines whether a firm's sinking fund decision is affected by agency costs. The paper argues that sinking funds can be an effective device to resolve the problems of information asymmetry, risk incentives, and suboptimal investments. Empirical tests are provided. Results show that firms with certain characteristics related to agency problems tend to adopt a sinking fund provision in the bond indenture.     

Copula-based tests for cross-sectional independence in panel models

This paper proposes the copula-based tests for testing cross-sectional independence of panel models.     

To improve investors' valuation of accounting earnings in emerging markets: evidence from Taiwan

The valuation of accounting earnings is related to the level of earnings management used by the firm. In emerging markets where earnings management is typically pervasive, investors lose confidence in accounting earnings and thus tend to under‐value earnings. Using data from Taiwan, we show that better governance characteristics are associated with improved investor valuation of accounting earnings. Under weaker governance structures, such as excessive control on the part of majority shareholders, small board size, and chief executive officer/chairman of the board duality, the market tends to under‐value accounting earnings. Reducing controlling shareholders' ownership, increasing board size, and reinforcing the monitoring function of the board improves investors' ability to value accounting earnings. Copyright © 2010 ASAC. Published by John Wiley & Sons, Ltd.     

Regulations,earnings management,and post-IPO performance: The Chinese evidence

In this study, we examine whether government regulatory initiatives in China involving IPO by SOEs may have contributed to opportunistic behaviors by the issuer. We focus on two sets of IPO regulations issued between January 1, 1996 and February 11, 1999: pricing regulations, which stipulate that IPO prices be a function of accounting performance, and penalty regulations, which penalize IPO firms for overly optimistic forecasts. We find that IPO firms that report better pricing-period accounting performance have larger declines in post-IPO profitability, lower first-day stock returns and worse long-run post-IPO stock performance. Furthermore, IPO firms that make overoptimistic forecasts also have lower first-day returns and worse post-IPO stock performance. Using non-core earnings as the proxy for earnings management, we document some evidence that IPO firms that report higher pricing-period accounting performance have engaged in more income-increasing earnings management. Hence, pricing regulations may have induced IPO firms to inflate pricing-period earnings and affect the post-IPO performance negatively. On the other hand, penalty regulations have deterred IPO firms from making overoptimistic earnings forecast and therefore have a positive impact on the behavior of IPO firms.     

Negotiators' Communication, Perception of Their Counterparts, and Performance in Dyadic E-negotiations

The aim of this study was to improve our understanding of negotiation strategies, behaviors, and outcomes, and the relationships between these factors based on data collected from questionnaires, actual behavior during the negotiation process implemented using e-negotiation system, and the negotiation outcomes. This study clustered the negotiators based on either the negotiators' own strategies or their thoughts about those of their partners. This resulted in a division into cooperative and noncooperative clusters. We found that the negotiators whose own strategies are less cooperative tend to submit more offers but fewer messages. However, these people consIDer that they have less control over the negotiation process compared with those who adopt a more cooperative strategy, who make fewer offers but send more messages. Those in the cooperative cluster consistently feel friendlier about the negotiation and more satisfied with the outcome and their performance. Further, there is a correlation not only between self-strategies and the thoughts about partners' strategies, but also between strategies and final agreements. Finally, the proportion of negotiations reaching agreement is larger for the cooperative cluster than for the noncooperative cluster.     

The memory-search frame effect: impacts on consumers’ retrieval and evaluation of consumption experiences

Marketing Letters - When consumers recall past consumption experiences (e.g., vacations), they often need to search their memory for relevant events within certain time frames (e.g., the past...     

Pricing of moving‐average‐type options with applications

Moving‐average‐type options are complex path‐dependent derivatives whose payoff depends on the moving average of stock prices. This article concentrates on two such options traded in practice: the moving‐average‐lookback option and the moving‐average‐reset option. Both options were issued in Taiwan in 1999, for example. The moving‐average‐lookback option is an option struck at the minimum moving average of the underlying asset's prices. This article presents efficient algorithms for pricing geometric and arithmetic moving‐average‐lookback options. Monte Carlo simulation confirmed that our algorithms converge quickly to the option value. The price difference between geometric averaging and arithmetic averaging is small. Because it takes much less time to price the geometric‐moving‐average version, it serves as a practical approximation to the arithmetic moving‐average version. When applied to the moving‐average‐lookback options traded on Taiwan's stock exchange, our algorithm gave almost the exact issue prices. The numerical delta and gamma of the options revealed subtle behavior and had implications for hedging. The moving‐average‐reset option was struck at a series of decreasing contract‐specified prices on the basis of moving averages. Similar results were obtained for such options with the same methodology. © 2003 Wiley Periodicals, Inc. Jrl Fut Mark 23:415–440, 2003     

Innovation quality of firms with the research and development tax credit

This paper examines innovation quality of U.S. research tax credit users (i.e., firms with currently earned research tax credits). Prior literature reports that the research tax credit is effective in increasing research and development (R&D) expenditures and reducing managers’ myopic behavior. However, little is known about the real (or economic) effect of R&D tax credits, as most of these findings have been based on estimated R&D tax credits rather than actual R&D tax credits. Additionally, some researchers and the government still have concerns about the real effect of R&D tax credits by criticizing the ambiguity and complexity of the tax codes (IRC Section 41). Therefore, I use actual R&D tax credits identified in firms’ 10-K and state R&D tax credits as identification tests to reduce endogeneity issues. My results indicate that research generating R&D tax credits contributes to better innovation quality and higher return volatility but lower pre-tax profitability. Overall, these findings imply that enacting the R&D tax credit provisions would trigger better innovation.