Browsing by Author "Tsai, Bi-Huei"

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An Early Warning System of Financial Distress Using Multinomial Logit Models and a Bootstrapping Approach
(2013-03-01)
Tsai, Bi-Huei
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管理科學系
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Department of Management Science
This study adopts multinomial logit models to separately measure the extent to which financial ratios and corporate governance signal the likelihood of "slight distress events" and "reorganization and bankruptcy." The results show that corporate governance variables are closely related to the occurrence of "slight distress events." The estimated misclassification costs of the 1,000 resamples generated through bootstrapping procedures are statistically lower for a model that makes use of corporate governance (CG model) than one without corporate governance (non-CG model) at all cutoff points in 2009, and cutoff points from 0.11 to 0.27 in 2008. Since corporate governance is incrementally useful in predicting financial distress, the CG model's predictive ability improves as two corporate governance factors are considered: ownership ratio of insiders and pledge-ownership ratio of insiders.
Analysis of Patent and Profitability in Taiwan Semiconductor Firms
(2010)
Tsai, Bi-Huei
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管理科學系
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Department of Management Science
This investigation seeks to ascertain the relevance between firm profitability and innovation. This paper regard granted patent as the indicator of innovation. Next, we further explore how the company size, export ratio and research and development ratios (R&D ratios), patent infringement lawsuits affect firm innovation. The impact of lawsuits on innovation is investigated in terms of the following aspects. First, this investigation empirically explores the relations between granted patent number and corporate profitability. Second, this paper empirically analyzes whether the plaintiffs file the patent infringement lawsuits to protect their property rights, so the patent infringement accusation lawsuits force enterprises to concentrate on intellectual property rights. This paper employs 59 integrated-circuit (IC) design firms, 11 IC manufacturing firms and 17 IC packaging and testing firms from 2001 to 2006 in our sample. The results exhibit the rate of return on asset is higher for firms which hold more granted patents. In particular, Taiwan granted patent number dominates firm profitability. In addition, both company size and RD ration are positively related to the innovation ability. Also, we find the rapid growth of Taiwan and U. S. granted patents after patent infringement lawsuits. It implies that such litigations enforce enterprises to involve in R&D activities. Particularly, the patent growth is found substantially greater for the defendants than the plaintiffs. To refute the charge and defend corporate competitiveness, firm managers will enhance patent development after the patent infringement accusations. Thus, the innovative ability of these firms become superior and more patents are successfully developed.
Application of Vertical Disintegration Theory in R&D Effect on Firm Value in Semiconductor Industry
(2014-01-01)
Chou, Shin-Bin
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Tsai, Bi-Huei
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交大名義發表
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National Chiao Tung University
This paper focuses on the Taiwan integrated circuit (IC) industry because the global market shares of Taiwan IC manufacturing industries are ranked number one. The purposes of study are to compare the differences in the effect of innovation activities on the market value among the IC design, manufacturing, packaging and testing industries and to evaluate whether the tax shields can increase firm value. The results statistically indicate that R&D significantly enhance market values in IC design firms, while does not in IC manufacturing firms, indicating IC firm\'s R&D has a significant impact on the market value in IC design firms. In addition, this investigation concludes that the coefficient of tax shield is insignificant. Finally, the coefficient of book value (equity) in the regression equation is larger than one. The results are consistent with the conservatism principle in the accounting field. Furthermore, we find that the marginal impact of R&D on market values in IC design industries is larger than those in IC manufacturing industries. Under the vertical disintegration structure of Taiwan IC industry, each step of IC manufacturing, packaging and testing stages is fixed with standardized machinery and equipments, so these IC manufacturing stages do not rely on R&D as much as IC design stage does.
Applications of Gompertz Model in Foreign Direct Investment of Taiwan\'s IC Design Industry into China
(2015)
Tsai, Bi-Huei
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管理科學系
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Department of Management Science
Previous studies never uses Gompertz model integrated with genetic algorithms to express the evolutions of capital flows although Gompertz model is suitable in the field of statistics, management science, information technology, product innovation, technological forecasting and finance to express the growth diffusions. This work utilizes Gompertz diffusion model integrated with genetic algorithm to illustrate the extension of foreign direct investment (FDI) from Taiwan to various Chinese areas, including East China, South China, North China, Central China, Northwest China, Northeast China, Mid-west China and Southwest China. In this study, FDI from Taiwan to China is defined as the capital flows from Taiwan into China to buy lands, build factories and recruit employees in China minus the capital flows coming back to Taiwan from Chinese branches. This study aims to utilize Gompertz model to explain why the Taiwanese IC design companies choose different Chinese regions to engage in FDIs. Empirical results indicate that the potential FDI size is the greatest for Taiwan\'s IC design firm flowing into South China. This is possibly caused by that Taiwanese IC design firms invest into South China earlier than other Chinese areas. In addition, Taiwanese IC design firms tend to imitate other firms when purchasing lands, building factories, recruiting employees and implementing FDIs into China. Our results also demonstrate that the incentive of imitating other firms to choose FDI locations is the most pronounced for firms investing in North China. Because North China is the administration center in China and few factories set up over there, so the number of Taiwan IC design firms investing in North China is fairly small. To avoid risks, the successive IC design firms tend to implement FDIs in North China only when they observe the safety or the profitability of other firm\'s divisions in North China. Consequently, the imitation effect is the greatest for firms investing in North China.
Cluster evolution of IC industry from Taiwan to China
(2009-10-01)
Tsai, Bi-Huei
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Li, Yiming
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電子工程學系及電子研究所
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管理學院
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科技管理研究所
In this work, we for the first time study the inter-industrial clustering behaviors of integrated circuit (IC) industry from Taiwan to China via amount of foreign direct investment (FDI). According to the mutual dependence among IC design, manufacturing and packaging-and-testing industries, Lotka-Volterra model is solved to explore the cluster evolutions. Effects of inter-level collaborations along production value chain on FDI flows into China are considered. Evolution of FDI into China for IC design industry significantly inspires the subsequent FDI of IC manufacturing, packaging and testing industries. Since the production of IC manufacturing, packing and testing enterprises depends on the preceded products that design industry has devised, the middle-stream manufacturing and downstream packaging-and-testing firms tend to converge toward upstream design houses. Taiwan IC industry's FDI amount into China is estimated to be cumulatively increasing, which suggests the clustering tendency of Taiwan IC industry. Prediction of FDI with Lotka-Volterra model is superior to that of the conventional growth model (i.e.. Bass model) because the industrial mutualism among various stages is included. The flows of FDI have not yet reached equilibrium points, so the FDI inflows into China will expand for IC design or packaging-and-testing industry, while decline for manufacturing industry. (C) 2009 Elsevier Inc. All rights reserved.
Does Litigation over the Infringement of Intellectual Property Rights Hinder Enterprise Innovation? An Empirical Analysis of the Taiwan IC Industry
(2010-06-01)
Tsai, Bi-Huei
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管理科學系
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Department of Management Science
This paper seeks to clarify the relationship between intellectual property right (IPR) infringement lawsuits and innovation by firms through an analysis of data from eighty-seven Taiwanese integrated circuit (IC) manufacturers in the period 2001-2006. The results show that the rapid growth in patent grant is positively related to the occurrence of patent infringement lawsuits, which implies that IPR infringement litigation strengthens firms' incentives to innovate. Patent holders adopt an "aggressive strategy" that makes use of the offensive function of patents to initiate lawsuits against alleged violators. The defendants then adopt a "regressive strategy" by building up "patent walls" to;vitae the charge and defend themselves. In addition, Taiwanese IC firms are more inclined to develop patents when they are defendants rather than when they are plaintiff's. This suggests that the defensive function of patents has a more profound impact than the offensive function for Taiwanese IC firms. These firms do not possess the core technology needed in IC-related manufacturing processes, and they have in the past applied other firms technology without obtaining legal licenses. In response to accusations of infringement, Taiwanese IC firms adopt a "regressive strategy," encouraging their employees to develop patents which they then use to refute the charge of IPR infringement. In addition, it is found that stock-based bonuses are a better incentive for encouraging employees to develop patents for their firms.
Dynamic Modeling and Simulation of Taiwan's IC Industrial Clustering to China
(2009)
Tsai, Bi-Huei
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管理科學系
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Department of Management Science
In this work, we for the first time utilize numerical methods to computationally clarify the clustering dynamics of integrated circuit (IC) industry from Taiwan to China. According to the relationship between the foreign direct investment (FDI) and the industrial clustering phenomenon, we first formulate a dynamic growth FDI model for studying the industrial clustering evolutions. The effects of the innovation, Imitation and potential investment factors on the clustering behaviors are systematically considered. This examination is further advanced to forecast the trend of Taiwan's IC industrial clustering to China, where the accuracy among the predicted data as well as the collected data is compared and validated. The results indicate the significant internal influence of intra-industry communications on the FDI evolution into China. Taiwan IC firms tend to successively imitate the experienced firms to engage in FDIs in China. Particularly, the internal impact is the strongest for IC manufacturing firms, revealing its greatest clustering effect. The Taiwan IC industrial FDI amount in China is cumulatively predicted increasing, which once again supports the clustering tendency of IC industries. Finally, the FDI prediction is more accurate for IC design, packaging and testing industries than for IC manufacturing industry due to the governmental FDI restrictions of IC manufacturing industry.
Dynamical Competition of IC-Industry Clustering from Taiwan to China
(2009)
Tsai, Bi-Huei
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Tsai, Kuo-Hui
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管理科學系
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Department of Management Science
Most studies employ qualitative approach to explore the industrial clusters; however, few research has objectively quantified the evolutions of industry clustering. The purpose of this paper is to quantitatively analyze clustering among IC design, IC manufacturing as well as IC packaging and testing industries by using the foreign direct investment (FDI) data. The Lotka-Volterra system equations are first adopted here to capture the competition or cooperation among such three industries, thus explaining their clustering inclinations. The results indicate that the evolution of FDI into China for IC design industry significantly inspire the subsequent FDI of IC manufacturing as well as IC packaging and testing industries. Since IC design industry lie in the upstream stage of IC production, the middle-stream IC manufacturing and downstream IC packing and testing enterprises tend to cluster together with IC design firms, in order to sustain a steady business. Finally, Taiwan IC industry's FDI amount into China is predicted to cumulatively increase, which supports the industrial clustering tendency for Taiwan IC industry. Particularly, the FDI prediction of Lotka-Volterra model performs superior to that of the conventional Bass model after the forecast accuracy of these two models are compared. The prediction ability is dramatically improved as the industrial mutualism among each IC production stage is taken into account.
Earnings Management before Rights Issues and the Subsequent Cash Transfer in Chinese Firms
(2009)
Tsai, Bi-Huei
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管理科學系
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Department of Management Science
Unlike private enterprises in developed markets, political influence is profound upon Chinese state-dominated firms. Under this consideration, this paper demonstrates how political impact interferes in Chinese managers' decisions. State-assigned managers were found to deliberately transfer cash raised via rights issues from the public shareholders to the state by cash dividends in order to please Chinese politicians. Especially, to meet the regulatory requirement of rights issues, managers from firms which distributed more cash dividends in the same year of rights issues were more likely to inflate earnings before rights issues. The earnings inflation which managers use to boost firm's incomes is defined as "earnings management". Furthermore, the empirical results also exhibit that firm's close relationship with the state enables managers to obtain approvals of rights issues easily, which reduces the firm's earnings management tendency. The manager's incentives of earnings management is closely attributed to the political intervention.
Elucidating the consumption and CO2 emissions of fossil fuels and low-carbon energy in the United States using Lotka-Volterra models
(2016-04-01)
Tsai, Bi-Huei
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Chang, Chih-Jen
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Chang, Chun-Hsien
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交大名義發表
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管理科學系
By using the Lotka-Volterra model, this work examines for the first time the feasibility of using low carbon energy to reduce fossil fuel consumption in the United States and, ultimately, to decrease CO2 emissions. The research sample in this work consists of data on energy consumption and CO2 emissions in the United States. Parameter estimation results reveal that although the consumption of low-carbon energy increases the consumption of fossil fuels, the latter does not affect the former. Low-carbon energy usage, including nuclear energy and solar photovoltaic power, increases fossil fuel consumption because the entire lifetime of a nuclear or solar energy facility, from the construction of electricity plants to decommissioning, consumes tremendous amounts of fossil fuels. This result verifies the infeasibility of low-carbon energy to replace fossil fuels under the current mining technology, electricity generation skills and governmental policy in the United States and explains why the United States refused to become a signatory of the Kyoto Protocol. Equilibrium analysis results indicate that the annual consumption of fossil fuels will ultimately exceed that of low-carbon energy by 461%. Since our proposed Lotka-Volterra model accurately predicts the consumption and CO2 emission of different energy sources, this work contributes to the energy policies. (c) 2015 Elsevier Ltd. All rights reserved.
Exploring the influence of enterprise resource planning (ERP) implementation on corporate performance using a modified data envelopment analysis (DEA) approach
(2011-07-18)
Tsai, Bi-Huei
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管理學院
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College of Management
The benefit of enterprise resource planning (ERP) system for corporate performance is almost ignored at earlier works. To advance earlier researches, this work employs financial data to explore factors of performance advance by illustrating the association between operation management and ERP installation. A two-stage analysis is made to achieve the aim. Firstly, input-output efficiency of a firm is evaluated based on a modified data envelopment analysis (DEA) approach, which controls the variations of macroeconomic prosperity among sample years. Secondly, exactly how the embedded modules of ERP systems enhance the input-output efficiency of a firm is then explored by performing Tobin regression analysis. Comparing the input-output efficiency between the pre-ERP and post-ERP periods, the input-output efficiency is proved to be higher in the post-ERP period since firms benefit from shorter turnover days of account receivable and inventories, as well as longer unpaid accounts turnover days after installing ERP. In addition, Tobit regression results indicate that acceleration of account collections, reduction of inventory levels and consulting support of leading vendors improve the input-output efficiency of the firms. This finding suggests that operational improvement owing to implementation of ERP systems increases the corporate performance.
Financial Distress Prediction Using Discrete-time Hazard Model and Rating Transition Matrix Approach
(2009)
Tsai, Bi-Huei
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Chang, Chih-Huei
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管理科學系
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Department of Management Science
Previous studies used constant cut-off indicator to distinguish distressed firms from non-distressed ones in the one-stage prediction models. However, distressed cut-off indicator must shift according to economic prosperity, rather than remains fixed all the time. This study focuses on Taiwanese listed firms and develops financial distress prediction models based upon the two-stage method. First, this study employs the firm-specific financial ratio and market factors to measure the probability of financial distress based on the discrete-time hazard models. Second, this paper further focuses on macroeconomic factors and applies rating transition matrix approach to determine the distressed cut-off indicator. The prediction models are developed by using the training sample from 1987 to 2004, and their levels of accuracy are compared with the test sample from 2005 to 2007. As for the one-stage prediction model, the model in incorporation with macroeconomic factors does not perform better than that without macroeconomic factors. This suggests that the accuracy is not improved for one-stage models which pool the firm-specific and macroeconomic factors together. In regards to the two stage models, the negative credit cycle index implies the worse economic status during the test period, so the distressed cut-off point is adjusted to increase based on such negative credit cycle index. After the two-stage models employ such adjusted cut-off point to discriminate the distressed firms from non-distressed ones, their error of misclassification becomes lower than that of one-stage ones. The two-stage models presented in this paper have incremental usefulness in predicting financial distress.
Forecasting Foreign Direct Investment by Using Bass Diffusion Model Integrated with Genetic Algorithms
(2014-01-01)
Tsai, Bi-Huei
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管理科學系
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Department of Management Science
The evolution of industrial clusters is a critical factor in the strategic development of locations for high-tech industries. Most previous studies have seldom quantified the location selections of Taiwanese IC design firms engaging in foreign direct investments in China because their access to crucial data may have been limited. This work developed a novel diffusion model to illustrate the extension of IC design clusters from Taiwan to China and chose foreign direct investment (FDI) as a quantitative indicator to measure the size of Taiwanese IC design industrial clusters in different Chinese regions. This study aims to understand what the distinctions in the process of FDI implementation are among the Taiwanese IC design companies which choose different Chinese regions to engage in FDIs. We also modified the conventional Bass model by optimizing parameters using genetic algorithm (GA) in conjunction with nonlinear least square method. The simulation is iterated 3,000 times. Finally, t-statistics were used to compare clustering features between the eastern and southern China areas. Simulation results demonstrate negligible standard deviation in the optimized parameters, which confirms the reliability of our findings. Furthermore, comparison results demonstrate that the Bass model optimized by GA integrated with NLS approach is more stable and accurate than the Bass model optimized by GA. The proposed approach is applicable to other high-tech industries and other locations around the world.
Forecasting global adoption of crystal display televisions with modified product diffusion model
(2010-05-01)
Tsai, Bi-Huei
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Li, Yiming
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Lee, Guan-Hua
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電機工程學系
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管理科學系
Liquid crystal display televisions (LCD TVs) embody properties of durable and high-technological products. In this work, we relax the restrictive assumptions of constant internal influence in the conventional growth model for worldwide diffusion of LCD TV innovation. Based upon the price impact on the imitating behaviors, we incorporate price factor into the Bass model to study evolutions of LCD TV market. Effects of innovation, imitation, price elasticity and potential market factors are systematically considered. Two different models, the conventional Bass model and the modified one are thus numerically solved and optimized to estimate the market dynamics of LCD TVs, where the results among the models as well as the collected data in the past decade are compared and validated for the best accuracy. The results of this study exhibit that LCD TV diffusion is mainly driven by consumers' word of mouth and 32-inch LCD TV remains to occupy the largest potential market among various size levels of LCD TVs. Previous LCD TV adopters persuade the potential ones to imitate the former in the TV transaction decisions. In particular, this model illustrates that LCD TV price reduction stimulates such imitating behaviors of successive LCD TV consumers. Due to the significance of the modeled price effect in LCD TV adoptions, the model with considering the effect of price performs better in fitness, prediction capability and parameter stability than the conventional one. (C) 2010 Elsevier Ltd. All rights reserved.
Forecasting interactive relationships and long-term equilibrium of CO2 emissions in industrial interdependent regions
(2020-01-02)
Tsai, Bi-Huei
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Chen, Cheng-Chi
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管理科學系
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Department of Management Science
This is the first study that analyses the interactive relationships of carbon dioxide (CO2) emissions between China and Taiwan, two industrial dependent regions, by applying Lotka-Volterra equations. The results of our investigation show that the industrial interdependence between Taiwan and China only significantly affects CO2 emissions of China, but has no impact on Taiwan's CO2 emissions growth rate. In the past few decades, China has greatly improved its infrastructure which attracted enterprises worldwide to set up factories in China. When Taiwanese industries transferred their products manufactured in China, the CO2 emissions generated by these productions increase substantially. In addition, the result of equilibrium analysis and Lyapunov functions further reveals that the future trend of annual CO2 emissions from China and Taiwan will tend to reach a stable long-term equilibrium point, implying that the excessive CO2 emissions from Taiwan and China will be efficiently controlled by environmental protection policies and technology improvement on low-carbon energies. In terms of forecast accuracy, the proposed Lotka-Volterra equations predict future CO2 emissions from China and Taiwan more accurately than the Bass model since the Lotka-Volterra equations take CO2 emissions in each region and the correlations of CO2 emissions between different industrial dependent regions into consideration.
Innovation Spillover Effect in Semiconductor Industry
(2010)
Tsai, Bi-Huei
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管理科學系
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Department of Management Science
The contribution of external intellectual property development by other firms to firms' internal innovation and productivity improvement is defined as "spillover effect". While some criticize that the intellectual property right protections on patents hinder the spillover effect, others propose that the compulsory patent disclosure or patent licensing enforces innovation spillovers. This paper thus provides the empirical evidence of patent and R&D spillover effect on productivity to resolve the controversy. The findings support that the spillover effect derived from other companies' innovative activities can enhance firm process or product innovation, thereby improving firm performance. Since technology learning from intra-industry R&D activities or patent development is swiftly facilitated for IC firms involved either in process innovation or in product innovation. R&D spillover effects in these firms appear evidently stronger. In contrast, because the IC firms rely more on patent licensing to develop core technology innovation, the patent spillover effect even is obvious as well.
Modeling diffusion of multi-generational LCD TVs while considering generation-specific price effects and consumer behaviors
(2013-10-01)
Tsai, Bi-Huei
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管理科學系
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Department of Management Science
An effective diffusion model characterized by the technology-induced function diversification and cost reductions can be developed to reflect whether competition exists among multiple generations of technology and to interpret how price reductions stimulate consumption. New technology can enhance the production skill levels of LCD TV manufacturing, enabling successive generation of LCD TV to become larger-sized than the previous generation, reducing the overall cost in manufacturing process and resulting in the price reduction of LCD TVs. However, previous diffusive predictions of LCD TVs using conventional multi-generational models ignore the price effect on market potentials and generational substitutions, so a novel generation-specific multi-generational model for the first time incorporating heterogeneous price elasticity and consumer behaviors across various LCD TV sizes is constructed in this work. This study applies nonlinear least square method to simulate the parameters of our modified model and further compares the accuracy between our modified model and the existing models. Analytical results indicate that price reduction strongly correlates with LCD TV sales, implying that price reductions increase the market potential of each LCD TV generation. Our modified model performs superior to the conventional multi-generational model in terms of predicting future shipment orbits of 26-, 42-, and 46-in. LCD TVs. (C) 2013 Elsevier Ltd. All rights reserved.
Modeling of Price Effects for the Adoption of LCD TV
(2009)
Tsai, Bi-Huei
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Li, Yiming
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Lee, Guan-Hua
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管理科學系
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Department of Management Science
This paper focuses on the global LCD TV panel shipments from the first quarter of 2002 to the second quarter of 2008. The aims of this study are to incorporate realistic price data to systematically inquiry effects of innovation, imitation, price elasticity and potential market size in global LCD TV panel diffusions. Two different models, the Bass model and the modified one are thus numerically solved and optimized to estimate the market dynamics of LCD TVs, where the results among the models and collected data in the past decade are compared and validated for the best accuracy. The results of this study imply that the positive internal influence is mainly through consumers' word of mouth. Previous LCD TV adopters persuade the potential ones to imitate the former in the TV transaction decisions. Particularly, LCD TV price reduction stimulates the successive LCD TV consumers, which indicates the significance of the modeled price effect in LCD TV adoptions. Empirical results for the past decade data shows that the 32-inch LCD TV remains the mainstream due to a largest size of potential market. In addition, the model with considering the effect of price performs better in fitness than that of the conventional one and the prediction of modified model is superior to that of the Bass model for 32-inch LCD TVs.
Modelling competition in global LCD TV industry
(2011)
Tsai, Bi-Huei
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Li, Yiming
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電機工程學系
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管理科學系
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Department of Electrical and Computer Engineering
This work analyses global shipments of Liquid Crystal Display Televisions (LCD TVs) by considering mutualism among multiple generations of LCD TVs. In applying the revised Lotka-Volterra equations, this study analyses the dynamic competitive relationship among producers of 26-, 32- and 37-inch LCD TVs. Equilibrium analysis is used to evaluate whether future shipment orbit could converge to equilibrium status. The prediction abilities of Bass growth model and Lotka-Volterra model are further compared to examine whether the Lotka-Volterra model, which incorporates the mutualism among multi-generation LCD TVs, performs better. The result shows that the relationships between 26- and 32-inch LCD TVs, and 37- and 32-inch LCD TVs are commensal. Sales of 32-inch LCD TVs are promoted by increased sales of 26- or 37-inch LCD TVs. Results of the equilibrium analysis indicate that competition among various sizes of LCD TVs will not be stable. The interactions among multiple generations of LCD TVs will influence each other, leading to great fluctuations in sales. Since this study incorporates the interactive relationships among various sizes of LCD TVs in the proposed Lotka-Volterra equations, the ability of the Lotka-Volterra model to predict the market evolution of LCD TVs is superior to that of the Bass model.
Predicting Financial Distress Based on the Credit Cycle Index: A Two-Stage Empirical Analysis
(2010-05-01)
Tsai, Bi-Huei
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Chang, Chih-Huei
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管理科學系
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Department of Management Science
Predictive models of financial distress are developed using the two-stage method applied to listed Taiwanese firms. Firm-specific financial ratios and market factors are adopted to measure the probability of financial distress based on the discrete-time hazard models of Shumway (2001). The Kim (1999) credit cycle index is further established using macroeconomic factors to determine the cutoff indicator of financial distress. The results demonstrate that performance improves as the distressed cutoff indicators are adjusted according to the credit cycle index in the two-stage models, suggesting that the model effectively predicts financial distress, particularly in emerging markets.