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A Study of Comparative Advantage on Creative Industries in Taiwan

Natenapang THONGSRI/Alex Kung-Hsiung CHANG

Keywords: Creative industries, revealed comparative advantage, comparative advantage

Many countries, as a result, has been focusing on promoting creative sector in order to develop new product and service, Taiwan is one of those country. Taiwan pays attention from large-scale manufacturing to the drive by knowledge, innovation, and creativity; these factors help improving Taiwan’s industrial competitiveness and advantage. This study examines to quantify the extent to which Taiwan has a comparative advantage in the creative industries. To study Taiwan’s competitiveness and its progress two widely used indexes are calculated: revealed comparative advantage (RCA) and revealed symmetric comparative advantage (RSCA). The results show that Taiwan has comparative advantage in art crafts, new media and performing art. Especially art craft products.


Capital Expenditure (CAPEX), Free Cash Flow (F.C.F.) and percentage Insider Ownership (% I.O.): An Example of the Network and Information Industry

Chao-Hui YEH

Keywords: Capital Expenditure (CAPEX), Free Cash Flow (FCF), percentage Insider Ownership (% IO), and investment–cash flow sensitivity

Network and information industry affect country’s competition, whether top managers of those corporates pursuit their private benefits by using investment/Capital Expenditure (hereafter CAPEX) are very important to those corporates and their countries. Based on this, this study explores TEJ panel data from 2006 to 2016 to investigate the CAPEX, Free Cash Flow (hereafter F.C.F.) and percentage Insider Ownership (hereafter % I.O.) of the listed companies in Taiwan’s network and information industry. This study provides new evidence of the effect of the % I.O. (hereafter % IO) on investment sensitivity to cash flow (hereafter FCF). We posit that the % IO affects investment–cash flow sensitivity (hereafter ICFS) through information asymmetry and agency costs, commonly viewed as the two channels through which the CAPEX responds to the availability of FCF We further find that ICFS increases when the % IO increase. The ICFS is associated with both underinvestment when cash flows are low and overinvestment when cash flows are high. The FCF is positively correlated with the CAPEX, intensifying the ICFS.
This paper finds that the FCF is significantly and positively related to their CAPEX, and the influence of FCF on the CAPEX increases as their % IO increases. These results are inconsistent with the FCF puzzle, that is called managerial-overspending or over-investment (hereafter over-CAPEX), but consistent with the asymmetric-information puzzle in this paper. The empirical results showed that the companies with relatively low FCF and relatively high % IO could experience asymmetric-information puzzle, leading to managers proposing under-investment (hereafter under-CAPEX) or managerial-underspend; corporates pass up some projects with positive net present value (hereafter NPV) because of the excessive cost of external capital. This paper finds supports of asymmetric-information puzzle. This paper supports the hypothesis that there is a causal and economically significant link between a firm’s cash flow and its investment projects. Taken as a whole, the findings we present add further to the evidence supporting the hypothesis that cash flow plays a significant role in firms’ investment activities.


A Study on Investors’ Novel Preferences and Investing Behavior: A Comparison between Taiwan, Singapore, Malaysia, Hong Kong and Macau

Alex Kung-Hsiung CHANG/Yen-Yu LIU/Po Tsang LIN/Yun Hei YAU*Hong Kong /Ji Syuan GOH*Malaysia /Cheok Hou HA*Macau

Keywords: Novels Preference, Investment Character, Investment Behavior, Disposition Effect, Region

We try to understand people’s mental and behavior by discussing the relationship between novels preference and investment behavior of individual investors of stock markets in this thesis ; Basing on behavioral finance studies,we found that humans would change their attitude of risk and return when the environment is different ; on the other side,research on investment psychology also indicates that psychological effects of market returns on investment benefits are significantly related.
We study the relationship between novels preference and investment behavior of individual investors in stock market by issuing questionnaires on the internet across three different region: Taiwan, HongKong, Macau, Singapore and Malaysia in this thesis by using basic statistics analysis, factor analysis, cluster analysis, analysis of variance ANOVA test and Chi-square test as the analyzing tools. The result shows that the correlation between novels preference, demographic variables, transaction statistical variables and investment character were significant which leads to specific investment bias and disposition effect.
We hope the result can help investors to review their own novels preference corresponding to the investment style which cause investment bias and disposition effect as a measure of their personal investing bias, creating a better investment performance.