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A Bank Intellectual Capital Mode

Chao-Hui YEH

Keywords: Intellectual Capital Model, Free Cash Flows Valuation Model.

Intellectual Capital can be said to constitute valuable factors not shown in accounting financial statements, but which are of critical importance to a company’s long-term profitability. This study models the relationship between intellectual capital(IC hereafter) and various loans in bank lending. Method: Pioneering and exhaustive research by Yeh (2001) discusses operating free cash flows valuation model (FCFVM hereafter). This paper extends the FCFVM to derive mathematically the accounting items of IC for lending banks. The FCFVM analyses the relationship between market value of equity and accounting activities (investments) in the manufacturing firms. This study adds to the FCFVM literatures by applying it to lending banks where operating assets are various loans, which are of critical difference to a manufacturing firm. Result: We find that IC (the difference between market and book value of equity) is a function of fee income, performing loans and new loan investment. This implies that the most important assets of banking industry are reputation, honesty, and commitment. Conclusion: We conclude that the sales of fee-based services, performing loans and new loan investment are valuable factors in bank lending. With our mathematical model, the empirical analysis is more disciplined than that of many prior ad-hoc valuation studies. Our model could be extended to encompass other valuable factors in banks that are also likely to drive market and book values differently. Directions for Future Research: We suggest a number of value-driving activities of banks, including deposit taking, credit card services, mortgage servicing rights and trust activities. The combination of fee income and new deposit investments in our model will partially describe these activities. Nevertheless, it is potentially fruitful to use our model to incorporate these and other factors of value more explicitly. Within our modeling framework this would require identification of the investing activities that give generate these hidden values. These activities could take the form of new investments in social capital, that is, it is social capital that transforms human capital into producing positive career outcomes and increasing investors’ perception of potential… Such an extension would likely result in a valuation model that contains more financial statements reports items, especially the profit/loss account and balance-sheet of the banks.


An Empirical Study of Grey VAR on Interactive Structure between Stock Return of Investment and Technical Index – An Example of Taiwan Top 50 ETF

Alex Kung-Hsiung CHANG/Yu-Hsiang TSENG/Natenapang THONGSRI

Keywords: GM(1,1),Taiwan Top 50 ETF, Technical Analysis, Granger Causality, Grey Vector Autoregression Model(GVAR)

Using the daily data of Taiwan Top 50 ETF from January 2011 to December 2015 as examples. Trying to improve the VAR on interactive structure between technical index and stock return by using Grey forecasting model GM(1, 1), and compare with the original technical index and stock return. First of all, we use GM(1, 1) to whiten the original data, and grey technical index are obtained. We choose traditional technical index such as KDJ, MACD, RSI, BIAS and W%R as agency index. And put the original data and whiten data into Granger causality test and VAR model to find out the Granger causality and interactive structure between technical index and stock return, and compare the Granger causality and interactive structure between the original data and the whiten data. We found:

Both of the original data and the whiten data shows Granger causality between technical index and stock return. However, the whiten data shows more two-way reaction than the original data. And Both of the original data and the whiten data shows interactive structure between technical index and stock return. But the whiten data improve the explanatory ability of technical index to stock return. And the whiten data also increase the width of impulse response. And result shows the technical index still work in Taiwan stock market. This study doesn’t support a weak-form efficiency market hypothesis in Taiwan stock market.


An Exploratory Study of Consumers’ Organic Food Consumption through Storytelling


Keywords: Storytelling Perspective, Story Categories, Promotional Programs, Organic Food, Consumer Response

Food safety issues led to the emergence of the organic food market. This study examines whether story types and contents related to organic food have an impact on consumer responses with storytelling perspective. Eight types of organic food stories were obtained from study 1. In study 2, not all the organic food stories had a positive impact on consumer responses, and the different stories had significantly different effects on consumer responses. In extended analysis, whether in terms quantity or influence level, storytelling is the approach that is most likely lead to greater consumer satisfaction/repurchase intention compared to promotional programs.


Good Products Will Not Betray You

Jung-Hua CHANG/Shan-Huei WANG

Keywords: Product betrayal, Betrayal aversion, Perceived quality, Brand image

Product betrayal is defined as consumers being harmed directly by the function designed to provide benefits or protection. Consumers are concerned about even a slight risk of product betrayals; therefore, they avoid choosing any kinds of products that present this risk. Betrayal aversion implies that none of products could earn consumers’ trust. However, we propose that consumers’ perceived quality and brand image could reduce the negative effect of product betrayal. Two experiments were conducted to test our argument. The empirical results also provide useful implication for defensing product betrayal aversion.