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This study explores the differences in energy consumption between the highly economically developed United States and economically underdeveloped Africa. This study conducted the parameter estimation and equilibrium analysis of a Lotka–Volterra model to investigate the short-term and long-term relations of different types of energy, respectively. The parameter estimation results show that nuclear energy consumption increases the consumption of fossil fuels in the United States but decreases fossil fuel consumption in Africa. This implies that Africa can replace fossil fuels with nuclear energy in the short run. Given the current state of energy consumption, the results of the equilibrium analysis indicate that the United States’ nuclear and fossil fuel consumption will reach a stable long-term equilibrium. However, Africa will experience significant fluctuations in nuclear and fossil fuel consumption, and both nuclear and fossil fuel consumption will eventually be depleted. The highly economically developed United States arranges energy consumption in an environmentally friendly way and reshapes economies to achieve sustainability, so its long-term energy consumption is more stable than economically underdeveloped Africa. Accuracy analysis results show that the nuclear or renewable energy consumption predicted by the Lotka–Volterra model is more accurate than that of a Bass model since the Lotka–Volterra model considers energy interactions.

The effects of green marketing orientations for increasing the competitive advantage and improving the sustainability of the hospitality industry during the COVID-19 pandemic are receiving more attention. As the hospitality industry attempts to assimilate green marketing and move in the path of sustainable development, administrators need to expand their efforts for improving natural environmental orientation (NEO), market orientation, resource orientation, and brand orientation by applying their green marketing orientations to hospitality’s strategies during the COVID-19 pandemic. Only few studies have examined the improvement of green marketing orientations. The objective of the research is to address this issue, applying the methods of fuzzy mixture MCDM (multiple criteria decision-making), with fuzzy decision-making trials and an evaluation laboratory (DEMATEL), and fuzzy DEMATEL-based ANP (fuzzy DANP) to inspect the feedback and interdependent issues among numerous elements/dimensions of green marketing orientations. In an uncertain environment, an empirical case study of the hospitality industry is shown to demonstrate the recommended combined approaches and, finally, to state the best enhancement approaches for administrators. This result shows that the natural environmental orientation is the most important factor.

Purpose of study: This study investigates the change of stock returns during the Lehman Brother’s announcement of bankruptcy in 2008 for the Taiwanese listed video game companies. We further explore the change of stock returns for the Taiwanese listed video game companies after Taiwan’s economy recovers from Lehman Brother’s bankruptcy. Methodology: This study utilizes the event study method to statistically test abnormal returns so as to understand whether the Lehman Brother’s bankruptcy-related event affects stock prices and whether securities prices reflect Lehman Brother’s bankruptcy-related information. Main Findings: The results show a significant negative abnormal rate during Lehman Brother’s declaration of bankruptcy on Sep. 15, 2008. Investors were affected by the financial crisis caused by Lehman Brother’s bankruptcy and fully reflected on the stock prices of that day. In addition, our results show that video game companies have significantly positive returns when most Taiwanese electronics firms stop no-pay leave on March 31, 2009. It represents investors were encouraged by this information and fully reflected on the stock prices. Implications: The results support the efficient market hypothesis. The pattern of CARs experiences a constant increase and displays the apparent price rise during the announcement of no-pay leave stop. The positive abnormal returns are accompanied by the economic recovery. Originality/Novelty: This investigation for the first time chooses the stop of no-pay leave as the indicator of economic recovery from financial crisis. Our analysis novel explores the impact of the financial crisis and the economic recovery on the game industry simultaneously and the results show significantly different market reactions between the occurrence of the financial crisis and economic recovery.

This work is the first to apply Lotka–Volterra model combined with genetic algorithm (GA) to predict the production relationships of high-tech industry among different areas. Previous studies analysed the trade interdependency among various countries, but few studies have highlighted the quantitative evidence of production relationships. Thus, this study utilizes motherboard shipment volumes to predict the competitive relationships of industrial production on both sides of the Taiwan Strait. Specifically, this work uses simultaneous non-linear least square regression in combination with GAs for numerical parameter optimization of the proposed Lotka–Volterra model. The results of parameter estimation reveal that shipment growth in China substantially promotes that in Taiwan, whereas the shipment growth in Taiwan curtails that in China. The standard deviation of the estimated parameters from the 3000 iterated simulations is small, confirming the reliability and stability of our parameter estimations...

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 CO 2 emissions. The research sample in this work consists of data on energy consumption and CO 2 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 CO 2 emission of different energy sources, this work contributes to the energy policies.

This study focuses on the reactions of abnormal returns on the Taiwanese solar stocks from eight anti-dumping events to examine the effect of anti-dumping tax on the Taiwanese solar companies. We collects the Taiwanese market reactions to U.S. announced anti-dumping tax on Taiwan, and the Chinese market reactions to U.S. announced anti-dumping tax on China. The purposes of this study are to explore whether abnormal returns are negative during the announcement of anti-dumping tax investigation. Furthermore, we test how abnormal returns change when the verdict of anti-dumping tax is favorable or unfavorable. Finally, we test whether Taiwanese solar stocks abnormal returns are positive during American announcement of anti-dumping tax on China. We find that the abnormal returns are negative during the announcement of anti-dumping tax investigation. The abnormal returns are positive if the verdict of anti-dumping tax is favorable. On the other hand, the abnormal returns are negative if the verdict of anti-dumping tax is unfavorable. Because China and Taiwan ranks top one and two in solar investment respectively, we find positive abnormal returns of Taiwanese companies during American?s announcement of anti-dumping tax on China.

This paper is the first to employ multiple outputs, patents and net sales, in our data envelopment analysis (DEA) to examine whether operational efficiency improves after enterprise resource planning (ERP) installations. The ANOVA analysis results show that granted patent number significantly increases after ERP installations. ERP implementation indeed stimulates integrated circuit firms to concentrate on innovation activities. Also, the DEA results show that firm efficiency significantly increases after the third year subsequent to ERP implementations. The Tobit regression results further prove that the curtailing of receivable turnover days and inventory turnover days are attributed to efficiency elevation through ERP installations.

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.

This investigation employs the Lotka–Volterra model to explore the market competitions between the mobile and desktop personal computer (PC) liquid crystal display (LCD) panels. The sales volumes of desktop and mobile PC LCD panels from each LCD company’s segment reporting income statements are summarized into the global sale volumes of the two specific products. Equilibrium analysis is conducted to analyze whether the quarterly sales volume of mobile and desktop PC panels reach the stable equilibrium by the Lyapunov function. This work examines the forecast accuracy of the Lotka–Volterra model. The parameter estimation results of the Lotka–Volterra model show the commensalism relationship between the mobile and the desktop PC LCD panels. The analyses indicate that when making a purchasing decision, a mobile PC is the first choice for consumers who care more about product innovation, quality, and mobility. After purchasing a mobile PC and becoming familiar with its operation, consumers may find that the computing ability and screen size of a mobile PC are too limited; therefore, consumers would purchase a desktop PC. The results of this study will provide the LCD industries insights concerning appropriate investment strategies to maintain competitive advantages. Equilibrium analysis results demonstrate that the quarterly sales volume of the mobile and desktop PC panels will reach stable equilibrium around 2020, maintaining the quarterly sale amount stabilized at 59,269 and 79,503 thousand pieces for desktop and mobile PC LCD panels, respectively. Finally, the analysis results show that Lotka–Volterra equations predict the global sales volumes of mobile PC and desktop PC panels accurately.

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.

In addition to reflecting how price decline stimulates consumption behavior, an effective diffusion model of liquid crystal display televisions (LCD TVs) featured by coexistence of multi-generational LCD TVs could also forecast accurately LCD TV sales under a market segmentation framework. As technological advances have led to a substantial decline in the price of LCD TVs, the diffusive prediction of LCD TVs based on prior conventional models, which neglect how price affects the LCD diffusions, must be biased. Based on anchoring and adjustment theory, this work develops extended Gompertz models that incorporate the consumers’ comparison of the initial prices with the later reduced prices to analyze the purchasing decisions of consumers for various sized LCD TVs from psychological perspectives. The effective ranges of market penetration rate are located under which the estimated parameters conform to the theoretical assumptions of product diffusion. Their forecasting accuracy is examined by further comparing prediction errors of the conventional Gompertz model and the extended Gompertz model. Empirical results indicate a significantly positive correlation between price reduction and LCD TV sales. Additionally, the market penetration rate is higher for smaller-sized LCD TVs than for larger-sized ones, implying that smaller-sized LCD TVs have reached market saturation, while larger-sized LCD TVs still have remaining market potential. Furthermore, the comparison results demonstrate that the effectiveness of the extended Gompertz model in predicting future shipment orbits of LCD TVs is superior to that of the conventional Gompertz model, since the extended model incorporates price factors.

To our knowledge, this study explores the correlation between the CO2 emissions of regions with close industrial interdependence by using Lyapunov functions for the first time. Analytical results indicate that China’s increasing imports of semifinished products from Taiwan have led to a decline in China’s fossil fuel consumption, subsequently lowering its CO2 emission growth rate. The industrial dependence between Taiwan and China markedly affected CO2 emissions of the latter. The analysis results of Lyapunov function reveal that the future trajectory of CO2 emissions from China and Taiwan will fail to reach stable equilibrium points. Their increased CO2 emissions cannot be absorbed entirely by plants through photosynthesis, implying that the excessive CO2 emissions from Taiwan and China will create ecological imbalances and worsen continuously. Any change in such CO2 emissions from Taiwan and China depends on how their industries are related. In terms of forecasting accuracy, the proposed Lotka-Volterra model can accurately predict future CO2 emissions from China and Taiwan since this model considers both the previous CO2 emissions in one region, and the economic competition and cooperation between these two regions. Results of this study significantly contribute to the efforts of governmental authorities in promulgating environmental policies.

Mainland China's economic system is in transition from a socialist system to a free economy. Chinese market standards tend to mirror those of developed countries, but unlike companies in developed markets, Chinese firms lack monitoring functions and are subject to strong political interference. The managers of firms with substantial state ownership are often designated by the state and are under strong pressure to comply with government requests for funds even when this is not in the company's interest. As this article illustrates, managers of Chinese listed firms offer rights issues to public shareholders and then transfer the proceeds to the state by distributing cash dividends. Firm income is often falsified in the financial statements issued before the rights-issue offering. During the three years prior to a rights issue, the gains from long-term investment, nonoperating income and revenue from related-party sales appear to be higher than would be expected. This implies that earnings are deliberately ...

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 ...

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.

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.

Previous studies mostly focus on bank performance, but few studies have effectively investigated how efficiency is reduced as banks expand credit card or cash card issuances. This study seeks to investigate how bank's relaxations of card issuance and credit revolvers reduce bank efficiency during card insolvency crisis in the Taiwanese banking industry. The results show that the credit card insolvency crisis reduces bank efficiency. Particularly, banks with low card issuance levels perform better than those with high card issuance levels. This suggests that if banks approve card applications while neglecting an applicant's capability to repay the card debt, they will suffer losses. Furthermore, the regression used in this study indicates that bank efficiency is negatively related to the issuances of credit cards, issuances of cash cards, and the revolving amount of credit cards. These findings imply that the relaxations relating to the card issuance or loosened approvals of credit revolvers reduced bank profits resulting from unpaid debts.

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.

This study investigates the usefulness of auditors' opinions, market factors, macroeconomic factors, and industry factors in predicting financial distress of Taiwanese firms. Specifically, two non-traditional auditors' opinions are evaluated: "long-term investment audited by other auditors" ("other auditor"), and "realized investment income based on non-audited financial statements" ("no auditor").The results of the 22 discrete-time hazard models show that "other auditor" opinions have incremental contribution in predicting financial distress, in addition to "going concern" opinions. This suggests that "other auditor" opinions possess higher risk of overstating earnings and firms with such income items are more likely to fail. Besides, we find that the macroeconomic factors studied significantly explain financial distress. Particularly, the survivals of electronic firms are more sensitive to earnings due to higher earnings fluctuations in such firms. Finally, models with auditors' opinions, market factors, macroeconomic factors, and industry factors perform better than the financial ratio-only model in financial distress prediction.

Previous studies on financial distress prediction choose the conventional failing and non-failing dichotomy; however, the distressed extent differs substantially among different financial distress events. To solve the problem, “non-distressed”, “slightlydistressed” and “reorganization and bankruptcy” are used in our article to approximate the continuum of corporate financial health. This paper explains different financial distress events using the two-stage method. First, this investigation adopts firm-specific financial ratios, corporate governance and market factors to measure the probability of various financial distress events based on multinomial logit models. Specifically, the bootstrapping simulation is performed to examine the difference of estimated misclassifying cost (EMC). Second, this work further applies macroeconomic factors to establish the credit cycle index and determines the distressed cut-off indicator of the two-stage models using such index. Two different models, one-stage and two-stage prediction models are developed to forecast financial distress, and the results acquired from different models are compared with each other, and with the collected data. The findings show that the one-stage model has the lower misclassification error rate than the two-stage model. The one-stage model is more accurate than the two-stage model., {"references":["F. J. L. Iturriaga and I. P. Sanz. \"Bankruptcy Visualization and Prediction\nUsing Neural Networks: A Study of U.S. Commercial Banks.\" Expert\nSystems with Applications, vol. 42, no. 6, 2015, pp. 2857-2869.","D. J. Philippe. \"Bankruptcy Prediction Using Terminal Failure\nProcesses.\" European Journal of Operational Research, vol. 242, no. 1,\n2015, pp. 286-303","A. Vineet and T. Richard. \"Comparing the Performance of Market-based\nand Accounting-based Bankruptcy Prediction Models.\" Journal of\nBanking & Finance, vol. 32, no. 8, 2007, pp. 1541-1551.","S. G. Hanson, M. H. 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Meckling. \"Theory of the Firm: Managerial\nBehavior, Agency Costs and Ownership Structure,\" Journal of Financial\nEconomics, vol. 3, no. 4, 1976, pp. 305-360.","R. La Porta, F. Lopez-de-Silanes, and Shieifer, A. Corporate Ownership\naround the world, Journal of Finance, vol. 54, 1999, pp. 471-517.\n[10] S. Claessens, S. Djankov, and L. H. P. Lang, \"The Separation of\nOwnership and Control in East Asian Corporation,\" Journal of Financial\nEconomics, vol. 58, pp. 81-112.\n[11] S. K. Staikouras, \"Multinational Banks, Credit Risk and Financial\nCrises.\" Emerging Markets Finance and Trade, vol. 41, no. 2, 2005,\npp.82-106.\n[12] E. I. Altman, B. Brady, A. Reti., and A. Sironi. \"The Link between\nDefault and Recovery Rates: Theory, Empirical Evidence, and\nImplications.\" Journal of Business, vol. 78, no. 6, 2005, pp.2203-2227.\n[13] B. Belkin and L. Forest. \"The Effect of Systematic Credit Risk on Loan\nPortfolio: Value at Risk and on Loan Pricing.\" Wagner Math Finance\nReport, 2007. [14] J. Kim, \"A Way to Condition the Transition Matrix on Wind.\"\nunpublished paper, RiskMetrics Group, New York, NY, 1999.\n[15] B. Belkin, S. J. Suchower, and L.R. Forest. \"A One-Parameter\nRepresentation of Credit Risk and Transition Matrices.\" CreditMetrics\nMonitor. 1998, pp. 46-56.\n[16] B. Belkin, S. J. Suchower, and L. R. Forest. \"The Effect of Systematic\nCredit Risk on Loan Portfolio Value at Risk and on Loan Pricing.\"\nCreditMetrics Monitor. 1998, pp. 17-28.\n[17] T. C. Wilson, \"Portfolio Credit Risk, I .Risk Magazine.\" 1997, pp.\n111-117.\n[18] T. C. Wilson, \"Portfolio credit risk, II .Risk Magazine.\" 1997, pp.56-61.\n[19] W. Hopwood, J. C. McKeown, and J. F. Mutchler. 1994. A\nre-examination of auditor versus model accuracy within the context of the\ngoing-concern opinion decision. Contemporary Accounting Research,\nvol. 10, no.2, pp. 409-431\n[20] W. H. Beaver, \"Financial Ratio as Predictors of Failure. Empirical\nResearch in Accounting: Selected Studies.\" Journal of Accounting\nResearch, vol. 4, no. Supplement, 1966, pp. 71-111.\n[21] W. H. Beaver, \"Market Prices, Financial Ratios, and the Prediction of\nFailure.\" Journal of Accounting Research. vol. autumn, 1968, pp.\n179-192.\n[22] T. Lancaster, The Econometric Analysis of Transition Data. New York:\nCambridge University Press, 1990.\n[23] T. Shumway, \"Forecasting Bankruptcy More Accurately: A Simple\nHazard Model.\" The Journal of Business, vol. 74, no. 1, 2001, pp.\n101-124.\n[24] J. Begley, J. Ming, and S. Watts. \"Bankruptcy Classification Errors in the\n1980s: An Empirical Analysis of Altman's and Ohlson's Models.\"\nReview of Accounting Studies, vol. 1, no. 4, 1996: 267-284."]}

This paper focuses on the price difference between depositary receipts (DRs) and the underlying securities issued by Taiwanese firms under foreign ownership restrictions. We examine two issues: (1) the price relationships between DRs and their underlying securities, and (2) the determinants of the price differences between DRs and their underlying securities. The empirical results show that large daily price differences are observed between DRs and their underlying Taiwanese securities. However, these price differences do not exist for DRs traded in different free-entry countries. We examine the determinants of the price differences between DRs and their underlying securities, and find that the time-series qualified foreign institutional investor (QFII) surplus, defined as the QFII ownership limit ratio minus the actual QFII ownership ratio, is inversely associated with the DR premium. As the foreign ownership restrictions become tighter, the QFII surplus decreases and the DR premium increases. The results also indicate that a structural change in the relationships between DR premiums and investor sentiment variables occurred in 1997. The DR premiums are sensitive to non-QFII holdings, defined as the total foreign holdings minus the QFII holdings, before 1997. However, post 1997 the DR premiums become more sensitive to firm size, but less sensitive to non-QFII holdings post 1997. The change in demand caused by regulation and investor sentiment is reflected in DR prices, which leads to the variations in DR premiums. Furthermore, this study finds a supply-side effect on DR premiums. As firms increase DRs issues, the DR premiums become smaller. This study concludes that regulation, investor sentiment (both can be viewed as demand for DRs), and supply conditions explain the DR premiums.

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.

A critical issue in the prediction of corporate failures is, whether to categorize sample firms in a binary fashion into failed firms and non-failed firms or to classify failed firms according to multiple financial difficulties. As most previous studies only employ the binary approach in their forecast, this work compares both the binary logit model and the multinomial logit model to determine whether or not the accuracy of forecasting corporate failures can be improved by further classifying financially-failed firms. The binary logit model recognizes slightly-distressed events and bankruptcy-and-reorganizations events both as corporate failure, while the multinomial logit model distinguishes between levels of corporate failure events as slightly-distressed firms and bankruptcy-and-reorganization firms. The empirical results show that the misclassification errors and error costs of the binary logit model are smaller than those of the multinomial logit model, suggesting that the binary logit model performs superior to the multinomial logit model in predicting corporate failure. The comparison results imply that the slightly-distressed firms and bankruptcy-and-reorganization firms are similar in characteristics. The occurrence of slightly-distressed events is already on the verge of bankruptcy, signifying major financial failure in the company operations. In such case, investors and debtors should be especially alert to withdraw their investments or terminate their loans to prevent loss.

Prior research has not effectively investigated how the profitability of Chinese branches affect FDIs in China [1, 2], so this study for the first time incorporates realistic earnings information to systematically investigate effects of innovation, imitation, and profit factors of FDI diffusions from Taiwan to China. Our nonlinear least square (NLS) model, which incorporates earnings factors, forms a nonlinear ordinary differential equation (ODE) in numerical simulation programs. The model parameters are obtained through a genetic algorithms (GA) technique and then optimized with the collected data for the best accuracy. Particularly, Taiwanese regulatory FDI restrictions are also considered in our modified model to meet the realistic conditions. To validate the model-s effectiveness, this investigation compares the prediction accuracy of modified model with the conventional diffusion model, which does not take account of the profitability factors. The results clearly demonstrate the internal influence to be positive, as early FDI adopters- consistent praises of FDI attract potential firms to make the same move. The former erects a behavior model for the latter to imitate their foreign investment decision. Particularly, the results of modified diffusion models show that the earnings from Chinese branches are positively related to the internal influence. In general, the imitating tendency of potential consumers is substantially hindered by the losses in the Chinese branches, and these firms would invest less into China. The FDI inflow extension depends on earnings of Chinese branches, and companies will adjust their FDI strategies based on the returns. Since this research has proved that earning is an influential factor on FDI dynamics, our revised model explicitly performs superior in prediction ability than conventional diffusion model., {"references":["Tsai, B.-H., 2009. Analysis of dynamic growth model in foreign direct\ninvestment of Taiwan IC industry into China, International Journal of\nAccounting Studies, 49, 73-94. 2","Tsai, B.-H. 2010. Application of dynamic diffusion theory in foreign\ndirect investment of Taiwan IC industry into China. International Journal\nof Computational Science and Engineering, 5(1), 2-8. 3","Smith, D. M. 1981. Industrial location: An economic geographical\nanalysis. 2nd edition. New York: John Wiley. 4","Bass, F. M. 1969. A modified product growth model for consumer\ndurable. Management Science, 15, 215-227. 5","Mahajan, V., E. Muller, and F. M. Bass. 1990. New product diffusion\nmodels in marketing: A review and directions for future research. Journal\nof Marketing, 54, 1-26. 6","Rogers, E. M. 2003. Diffusion of Innovations, 5th edition. New York:\nFree Press. 7","Bass, F. M. 2004. Comments on a new product growth for model\nconsumer durables. Management Science, 50 (12), 1833-1840. 8","Meade, N., and T. Islam. 2006. Modelling and forecasting the diffusion\nof innovation: A 25-year review. International Journal of Forecasting, 22,\n519-545. 9","Ruiz, E., and Leeflang, P. S. H. 2006. Diffusion of franchising as an\ninnovation of managerial organization. Marketing JRM, 65-75. 10\n[10] Mesak, H., and Berg, W. 1995. Incorporating price and replacement\npurchases in modified products diffusion models for consumer durables.\nDecision Science, 26, 425-449. 11\n[11] Mesak, H. (1996). Incorporating price, advertising and distribution in\ndiffusion models of innovation: some theoretical and empirical results\nexpectations in diffusion models. Computers and Operations Research,\n23, 1007-1023. 12\n[12] Parker, P. (1992). Price elasticity dynamics over the adoption life cycle.\nJournal of Marketing Research, 9, 358-367. 13\n[13] Tsai, B.-H., Li, Y. and Lee, G.-H., 2010, Forecasting global adoption\nof crystal display televisions with modified product diffusion model,\nComputers and Industrial Engineering 58 (4), 553-562. 14\n[14] Berkoune, D., Mesghouni, K and Rabenasolo, B. 2006. Lower bounds\nfor the scheduling problem with uncertain demands. International Journal\nof Applied Mathematics and Computer Science, 16 (2), 263-269. 15\n[15] Czekalski, P. 2006. Evolution-fuzzy rule based system with parameterized\nconsequences. International Journal of Applied Mathematics and\nComputer Science, 16 (3), 373-385. 16\n[16] McCall, J. 2005. Genetic algorithms for modelling and optimization, J.\nComput. Appl. Math. 184, 205-222. 17\n[17] Venkatesan, R., T. V. Krishnan and V. Kumar 2004, Evolutionary\nEstimation of Macro-Level Diffusion Models Using Genetic Algorithms:\nAn Alternative to Nonlinear Least Squares, Marketing Science 23, 451-\n464. 18\n[18] Goldberg, D.E. 1989. Genetic Algorithms in Search, Optimization and\nMachine Learning, Addison-Wesley. 19\n[19] Kalish, S., and S. K. Sen. 1986. Diffusion models and the marketing\nmix for single products. In Innovation Diffusion Models of New Product\nAcceptance, edited by V. Mahajan, and Y. Wind, 87-115. Cambridge,\nMA: Ballinger."]}

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.

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.

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.

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...

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.

Since Taiwan and U.S. integrated circuit (IC) industries cluster in Hsinchu Science Industrial Park (HSIP) and Silicon Valley, respectively, these IC firms can easily imitate any innovation through the interactions among intra-industry firms. The contribution of intra-industry innovation development to firms' technological advancement is defined as the "spillover effect". This paper compares how the innovation characteristics and industrial clustering influence the spillover effects. The results show the research and development (R&D) spillover effects in IC manufacturing, packaging and testing industries appear evidently greater than those in IC design industry, while the patent spillover effect exhibits greater for IC design industry than for the other IC industries. Similar production stages in IC manufacturing, packaging and testing industries enable firms to easily imitate R&D outcomes within the same industry. By contrast, the production process of IC design firms is diversified, so they hardly upgrade their technical skills through the interchange of R&D information within the same industry. Hence, the IC design firms, which focus on product innovation, rely more on patent licensing to develop core technology innovation. Finally, R&D spillover effect is evidently greater in U.S. IC design industry than in Taiwan IC design industry, while patent spillover effect appears greater in Taiwan IC design industry than in U.S. IC design industry. The IC design industry in U.S. free-rides intra-industry R&D outcomes more easily than that in Taiwan. Consequently, Taiwan IC design firms rely on patent spillovers to develop IC elements, which are compatible with the incumbent IC products.

This study applies dynamic diffusion theory to forecast Foreign Direct Investments (FDIs) of Taiwan IC industry into China. We compare the FDI external and internal influence factors among IC design, packaging and testing industries. The internal impact is stronger for IC packaging and testing firms than for IC design ones, revealing the profound imitating inclination of IC packaging and testing industry. The potential FDI amount is estimated to be much greater for IC packaging and testing industry. Consistent with product life cycle theory, Taiwan transfers low-end IC packaging and testing manufactory toward China where the labour wages are much lower.

Innovation effects on firm value have not been effectively discussed because previous studies ignore the market share and tax shields from Research and Development (R&D). This paper explores how innovation increases firm value through market shares of Personal Computer (PC) firms. The results exhibit that patent performance and tax shields are positively related to firm value. Our investigation also shows that dominant firms are more highly involved in innovative activities to maintain market power. The marginal benefit of innovation becomes greater for firms with stronger market share, which supports the complementary effect of market shares and innovations on firm value.