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Dealer Behavior in Imperfect Markets

Yaroslav ROSOKHA


University of Texas at Austin
University of the West

This research project intends to study the behavior of security dealers or market makers in a competitive financial exchange environment. This paper contributes to the existing market microstructure literature by examining whether there is a clear delineation of tradeoffs faced by traders in a concentrated vs. a competitive dealer market, if at all. The key issue is resiliency of these market mechanisms under a severe asymmetric information environment. We suspect that risk attitudes play a role in determining liquidity provision and we set up a series of experiments to verify this hypothesis.

The Need for Educating and Training for Competitive Presence in the International Business Community


DBA/IB, Ed. D., O.M
2328 Shepherd Drive
Northfield, New Jersey 08225 (USA)
TEL: (res) 609.646.1253
(cell) 609.226.2388
E-Mail: jpl2100@comcast.net

Our world is constantly changing. Our society is confronted with issues regarding globalization, international diversity, advances in technology, and threats of hegemony and world supremacy. Such innovative, productive advancements in computer technologies and high-speed internet services also offer opportunities for poor, uneducated minorities to learn about other people and improve their economies. Added features reinforced with elaborate, strategically-placed, global satellite systems and sophisticated protocols can significantly expand productivity.
Globalization has made the world smaller. It has influenced the homogenization of peoples from various societies with diversified cultures and customs. Merging with the concept of diversity, as an accepted norm, is the expressed need for mutual dependency among all associated groups. It is virtually impossible for complete independence or solidarity from global participation, and it would be counter-productive in this highly competitive global marketplace.
The opportunity for businesses, companies and enterprises to sustain a competitive presence in the international business community will greatly depend on their uncanny ability to achieve and enhance competitiveness, expand productivity and increase profitability. The impact of globalization has forced them to refocus their attention relating to developing progressive, innovative strategies affecting productivity. Originally, creating and integrating comparative advantages were sufficient to substantiate productivity and benefit many players, which could inevitably include regions and countries. However, the new direction for intercontinental organizations necessitates creating, developing and integrating innovative strategies that place value and customer satisfaction as competitive advantages utilized to establish long-term customer relationships with continuity aimed at broad-minded expansion. “Unless an organization is willing to adapt to change and incorporate consequential factors to create new market niches with differentiated productivity to reduce operating costs and increase corporate advantages it will face barriers that could have an adverse impact on profitability and shareholder wealth” (Porter, 1996, p. 331).
This paper discusses the need to have curricula guidelines for teaching, molding and training students to become progressive, competitive, productive, cross-cultural and cross-functional members of a global workforce incorporated into the mainstream of the educational process.

Valuation Model under Residual Income and Growth

Chao-Hui YEH

Department of Business Administration, I-Shou University, Taiwan, ROC

Ti-Ling WANG

Department of International Business, Kao Yuan University, Taiwan, ROC
TEL: +886-7-6577711 ext5914
E-Mail: chy@isu.edu.tw

Keywords: Valuation Model, Residual Income, and Growth

We generalize Yeh’s (2001) model to growth rates. Our analysis of the case when earnings suffice for valuation yields two models. Both (I) and (II) models can explain the price-to-forward-earning (P/E) ratio, but they do so with different dependent variables. In case of (I) formula, the return on equity (ROE) explains the P/E ratio. In case of (II) formula, the growth in expected net income explains the P/E ratio. Therefore one obtains two distinct ways of explaining the P/E ratio with transforming the mathematics. With growth being expected, it follows that the firm’s price equates book values add growth or equates capitalized forward net income add growth.

The Influence of Regional Development and Developer Behavior on Vacancy in Taiwanese Residential Construction: An Empirical Study

Henry H. Y. HSIEH

Assistant professor, Department of Business Administration, National Ping Tung University of Science and Technology
TEL: +886-8-7703202 ext7694
E-Mail: henry@npust.edu.tw

Keywords: Residential construction industry, Vacancies, Developer behavior, Regional development, Group irrationality, Rational window

Vacancy is influenced by developer behavior and exacerbated by regional development. Little research involves this issue. Yet it is growing important due to high vacancies of 1.56 million revealed by the 2010 residence and population survey (DGBAS 2010). The influential factors of vacancies are examined by constructing a developer behavior model and a dynamic vacancy model to examine the crucial factors of vacancies. A multiple regression model of developer behavior is built by a pooled cross-sectional time-series of 23 cities and counties in Taiwan during 1999-2010. A sample of 276 observations is tested. Further a dynamic vacancy model is constructed by two stage least square method (2SLS). The empirical results indicate that high level of group irrationality in developers and consumers. Region develops separately shaping different residential industrial life cycle. Structural vacancies contribute to high vacancies. However inequality of house ownership and group irrationality exacerbate the already existed vacancies. We suggest that government should frequently release more measurable indicators and updated information and make them available and accessible to improve individual cognition and rationality. Individual developer should adopt differentiation in design, services, quality, or value activity to reduce group conformity. By differentiation developer can increase group rationality widening rational window in order to reduce ineffective vacancy.

A Study of Grey VAR on Dynamic Structure between Economic Indicators and Stock Market Indices-An Example of the United States

Alex Kung-Hsiung CHANG*

Jennifer Chen-Yi CHEN

Caroline Wei-Ting HUANG

Ti-Hsuan SUNG

Yi-Chang LU

Scott Chin-Ming HUANG

Alex Wei-Ming CHEN

Professor* and bachelors of Department of Business Administration, National Pingtung University of Science and Technology, Taiwan, R.O.C
TEL: +886-8-7740374
E-Mail: bear419@mail.npust.edu.tw

Keywords: United States, Macro-Economic Indicators, The Dow Jones Index, NASDAQ Index, S & P 500 Index, PHLX Semiconductor Index, GM(1,1), Grey Vector Autoregression Model (GVAR)

This study takes four Indies and the four belonging indices from United States stock market and United States marcro-economic indicators as examples. The monthly closing stock indices and marcro-economic from January 2000 to December 2010 were sampled. We applied GM(1,1) on VAR into a GVAR to realize the dynamic structure between economic indicators and United States stock market indices which consist of the Dow Jones index, NASDAQ index, S & P 500 index, and PHLX Semiconductor index.
According to the empirical results, we found that interest rates, CPI’s, foreign reserves, M1’s, M2’s and M3’s have a Granger causality relationship with stock market indices respectively. Based on the AIC rule, stock market indices are a leading index to economic indicators for eight months. By using Granger causality, decomposition variance and the impact response analysis, we realized the existence of the dynamic structure between economic indicators and stock market indices in United States. And we discovered this dynamic structure is interacted and matched frequently at the state in United States economic.

A Study of International Business Theory Development

Ya-Ping CHOU

Cheng-Hsuan HUANG

Liang-Hua CHIEN

Jia-Ying ZHANG

Ying-Ying ZHUO

Chia-Shan TSAI

Yi-Chou WANG*

Lecturer and students of Department of International Business Management, Tainan University of Technology, Taiwan, R.O.C
TEL: +886-922520523
E-Mail: yichou@hotmail.com
The authors are deeply indebted to Professor McLee Yender, PhD, of Chang Jung Christian University, who inspired the conceptual framework of this paper.

Keywords: International Business, Knowledge Network, Citation Analysis, Mapping

This study is focus on IBR (International Business Review) and JIBSs (Journal of International Business Studies) for recent decades. Using the high cite references to find out the most influential articles and scholars, which presents a solid foundation for a knowledge network in international business area. It also can explore the process to relevant knowledge network. To map the intellectual structure of international business in the past 30 years, which can identify traces the evolution of international business research. It is not only finding the current popular topic, but also provides a valuable tool for researchers to point out e future direction and Contributors.

The Interaction of Corporate Governance and R&D: Evidence from Panel Data

Li-Hsun WANG

Dept. of International Business Management, Wenzao Ursuline College of Languages

Hsien-Ming CHEN

Dept. of Finance, Chang Jung Christian University

Chu-Hsiung LIN

Dept. of Risk and Insurance Management, National Kaohsiung First University of Science and Technology

Keywords: Corporate Governance, R&D, Stock Performance

R&D plays essentially in increasing firm’s growth and competitiveness. However, not all the R&D activities incur pleasing outcome. In this study, we try to investigate whether the corporate governance enhance investors’ confidence on R&D expenditure, consequently leading to positive market reaction. Using the unbalanced panel data from January 1998 to December 2010 with the fixed effect panel model, this study examines the interaction effect of firm’s R&D and the corporate governance on stock prices of Taiwan public firms. Initially, we find that market reacts conservatively to electronic firms (R&D-oriented firms) and positively to non-electronic firms. While the quality of corporate governance is taken into consideration, the interaction between corporate governance and R&D is found to associate positively with stock return in electronic industry. Whereas, no significant relation is found for those non-electronic firms. We suggest that investors might regard R&D as a substitution of corporate governance mechanism in non-electronic industries based on the agency cost hypothesis and the corporate governance enhancing the confidence of investors on R&D activity in electronic industry.

The Effects of Horizontal Acquisitions on Rivals: Short-term and Long-term Performance

Yu-Chieh CHAO

Assistant Professor of Department of Business Administration, National Pingtung University of Science and Technology, Taiwan, R.O.C
TEL: +886-8-7703202 ext7699
E-Mail: ycchao@mail.npust.edu.tw

Keywords: Horizontal Acquisitions; Rival Performance; Acquisition Performance; Event Study

This paper examines the predictions of market power hypothesis, productive efficiency view, and information efficiency view on rivals’ short-term and long-term performance. Evidence from 136 horizontal acquisitions with 1281 rivals during 1994-2003 shows that horizontal acquisitions create value for rivals in the short-term while destroy value for rivals in the long-term. That is, market power hypothesis and information efficiency view have a stronger prediction of rivals’ performance in the short-term. However, productive efficiency view determines rivals’ performance in the long-term. Implications for research and practice are discussed.

The Role of Innovation Capability on Business Performance at Small Medium Enterprises

Edlyn Khurotul Aini

Master Student Double Degree, Department of Business Administration, Brawijaya University and National Pingtung University of Science and Technology

David C.L. Shen

Association Professor, Department of Business Administration, National Pingtung University of Science and Technology, Taiwan

Mochamad Al Musadieq

Association Professor, Department of Business Administration, Brawijaya University, Indonesia

Siti Ragil Handayani

Association Professor, Department of Business Administration, Brawijaya University, Indonesia

Keywords: Learning Orientation, Information Technology Resources, Entrepreneurship, Innovation Capability, Business Performance

Small medium enterprises require strong innovation capability to achieve competitive advantage. Based on previous empirical researches, this study emphasizes the importance of innovation capability as the role on business performance. Data were collected from 228 of small medium enterprises in Kediri, East Java, Indonesia and analyzed using structural equation model. The major findings include first, innovation capability and entrepreneurship has significantly positive impact on business performance respectively. Second, learning orientation has a significant and positive effect on innovation capability. Third, IT resource has significantly positive impact on learning orientation and innovation capability respectively.

A Research for Measuring Taxi Service Quality in Hanoi

Tsung-Hao CHEN

Hsin-Yeh TSAI

Assistant Professor, Department of Business Administration, Shu-Te University, Taiwan, R.O.C.

Ngo Ngoc VI

Graduate student, Department of Business Administration, Shu-Te University, Taiwan, R.O.C. and graduate student, Vietnam Education University, Hanoi, Vietnam

Andrew LEE

Student, Department of Business Administration, Shu-Te University, Taiwan, R.O.C.
* Corresponding author: thchen@stu.edu.tw

Keywords: Customer Satisfaction, SERVQUAL Model, Taxi Transportation Service

Businesses must themselves seek for different ways to compete with their rivals. Since service quality appears, the stage for the assessment by the clients begins. Many researchers and experts have tried to identify measure and manage the quality of the services. Specifically, the quality is significantly more important in taxi services. Higher development of social life results in higher need for the taxi service. A large number of taxi companies have been established, thus the competitive pressure in the industry is considerably huge. As a result, in order to survive, compete and develop, the taxi companies must improve the quality of their services.
The aims of the study are to test the SERVQUAL scale in measuring the quality of taxi transportation service, to discover the components of quality of taxi transportation service, and to find out the effects of service quality on the customer satisfaction and the differences in service quality evaluation. The research results point out that satisfaction is affected by assurance and empathy of staff, tangibles and responsiveness. In particular, the assurance and empathy of staff is the largest affecting factor, followed by responsiveness and tangibles.

A FMEA-aided Autonomous Preventive Maintenance Program

Chee-Cheng CHEN

Associate Professor, Department of Business Administration, National Pingtung University of Science and Technology
TEL: +886-8-7703202 ext7679
E-Mail: carl2004@mail.npust.edu.tw

Keywords: FMEA, FTA, TPM, APM

Since 1971 Total Productive Maintenance (TPM) has been developed and phased into many manufacturing firms in Japan to promote productivity and competitiveness. Autonomous preventive maintenance (APM) systems are very special. The fundamental pillar of TPM includes a series of important systematical first line direct labors activities. The technical cost, human resources, and management issues are all considered. Failure Modes and Effects Analysis (FMEA) and Fault Tree Analysis (FTA) are the most popular failure analytical methods widely adopted over different industries. They are often used to examine the potential problems in the design and manufacturing phase; discovering possible failure causes before product design and manufacturing finalization. This study integrates the FTA and FMEA of techniques to establish an APM system that meets the company’s goal of reducing manufacturing costs, and promoting employee and equipment productivity. The major contribution of this study is constructing potential equipment failure modes and their Risk Priority Number (RPN) through FTA and FMEA integration transformed into a selection of items and their APM maintenance frequencies. A strategy for deploying employee technical capability upgrade through effective training is developed. This study uses the S company – a key manufacturer of Semiconductor material – as a case study to verify the model’s applicability and suitability.

iFAIRS: 2012 Issue

The Research on the Correlation Between Rate of Free Cash Flow and Financial Information of Business-An Example of Shenzhen B Stock

Chuancai YE / Lienhsiang Pan

Keywords: Pecking Order, Financial Leverage, Rate of Free Cash Flow

This Research takes as samples 52companies, publicly listed as B stock in the Shenzhen Stock Exchange during the period from 2008 to 2011. The rate of free cash flow (RFCFlow) in the company is considered as dependent variable, while company size (LGsize), financial leverage (Lev) , bank debt (Bankdebt) and dividend payment are regarded as independent variables So we check what kind of relationship exists between the free cash flow and the company scale of the listed companies? The test results reveal that there is significant positive correlation between the free cash flow and the scale of the business, and moreover the regression coefficient is 0.562. It means larger companies have bigger rate of free cash flow.

The Effectiveness of the Non-Profit Organization (NPO) the Implementation of SOP – YMC of Tainan

Yao-Wen HSU

Keywords: Non-profit Organization (NPO), SOP

Non-profit organizations (NPO) should be operated in different manners with various environments. For internal, they should lay stress on if its tactics can reach the desired performances and provide the best service to their customers (members); for external, self-marketing strategies are important to improve the association awareness, attract society’s elite to join the build-member force and achieve the mission of servicing to the society.
Therefore, to be sustainable as an enterprise, the association should be flexible in the internal organization and operate in adjustable approaches. So the association should keep flexible to modify its business strategy to develop activities which are suitable to the members.
Enterprises emphasize on the business performance, so how the association achieve the desired effect must be based on all the activities to assess whether they achieve their goals. Reviewing its effectiveness to do the improvement can encourage the future successors to follow the precedents and to shorten the convergent time, furthermore to avoid the occurrence of window period.

A Study on Business Administration and Strategy: A View from 36-strategy and Three Kingdom of Ancient China

Henry T.M. KAO

Keywords: 36-Strategy, Three Kingdom, Competition Strategy

It’s an interest topic how to apply the strategies from 36-strategy of ancient China on the business administration under variable operation environment. Based on the philosophy from 36-strategy during three kingdom of ancient China, this study discusses two topics about business administration and competition strategy initiation in modern operation environment.

A Study of the Chapter Coordination Strategy in the Guigu Zi on Political Activities in Taiwan-An Application of the Game Theory

Alex K.H CHANG / Yung-Ping WANG

Keywords: Elective Strategy of Political Parties, Guigu Zi, Game Theory

This paper aims to explore that the chapter coordination in the Guigu Zi and the Game Theory are applied to a study of elective strategy of political parties in Taiwan. These cases in the thesis focus on the strategies of both Chinese Nationalist Party(KMT) and Democratic Progressive Party(DPP)to the Five Cities Election and The Presidential Election in 2012.
Finally, the result is shown and implied up by the Game Theory, the strategies are analyzed, and the administrative implication and suggestion in these cases are also summaried. The thesis is provided to those policymakers for good programs and creativities.

Facing the Strategy Paradox: Application of Case-Oriented Comparative Method

Daniel Chan-Wei TSAI

Keywords: Strategy Paradox, Strategic Selection, Strategic Change, Narrative Strategy Story

Strategy Management Theory has been developed for a long time. Because in this period there are numerous scholars developed different theories from different background and perspectives, it exists many conflicts between these theories and Strategy Paradox become a big issue in this field. In this paper, we employ a Case-Oriented Comparative Method for examining how company solve Strategy Paradox and the proposed model can be analyze strategic selection and change of three Taiwan firms: Formosa Plastic Group, Uni-President Group, Tatung Group. Finally, empirical and managerial implications about narrative strategy story and Strategy Paradox are drawn from this research.

Exploring the Antecedents of Relationship Quality and Their Impacts on Customer Loyalty: Relationship Proneness as Moderators

David C.L. SHEN / Chun-Chao LO / Hsiu-Han CHANG

Keywords: Employee’s Expertise, Physical Environment, Customer Orientation, Relationship Quality, Customer Loyalty, Relationship Proneness

As economy development and the change of life style, dinning-out becomes more and more popular and leads to the prosperity of catering market in Taiwan. However, recently, with fierce competition and recession, it has been an important topic for western catering industry to understand how to build up a better relationship with customers, enhance customers’ loyalty and retain customers as many as possible.
In the past, most studies were based on suppliers’ perspective to analyze what the factors contribute to customer loyalty instead of basing on consumer behavior. The study treated the quality of relationship as mediator and intends to identify the antecedents of relationship quality and their impacts on customer loyalty. The antecedents of relationship quality include the expertise of employees, physical environment, and customer orientation. The moderator is relationship proneness. The survey was sent to consumers of 20 western restaurants in Kaohsiung by non-probability sampling. The delivery of the questionnaire was done by the study owner or the restaurants staff. 315 questionnaires were collected and 230 of them are valid questionnaires and response rate is 73.02%. Additionally, the study is conducted by SEM analysis to verify assumptions and cause-effect.
After we use SEM to analyze, we discover the conclusions of this research indicate that:
(1)The Employee’s expertise has a positive effect on Relationship quality.
(2)The Physical environment has a positive effect on Relationship quality.
(3)The Customer orientation has a positive effect on Relationship quality.
(4) The Relationship quality has a positive effect on Customer loyalty.
(5) Relationship proneness have a positive moderating effect on the relationship between Relationship quality and Customer loyalty.
Managerial suggestions are provided based on the above results.