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This study develops an environment, social, and governance (ESG) momentum strategy by combining information about ESG scores and the momentum effect. This study, subsequently, applies the ESG momentum strategy to Taiwanese and Japanese stock markets and investigates the performance of the ESG momentum strategy in each market. Detailed comparisons of the ESG scores and ESG momentum performance between the two markets are conducted. The empirical results show that the ESG momentum strategy can obtain enhanced profits in the Taiwanese market, while the ESG momentum strategy cannot lead to substantial profits in the Japanese market. In addition, the ESG momentum effect in the Taiwanese market can last for three years after portfolio formation. In the Japanese market, the ESG contrarian strategy may deliver better profits than the ESG momentum strategy.

The purpose of the paper is to investigate the price interrelationship between the Taiwanese and US financial markets.

The trivariate GJR‐GARCH (1,1) model and event study were employed to investigate volatility asymmetry and overreaction phenomenon, respectively.

The empirical results show that return volatility reveals the asymmetric phenomenon, and the holding period returns on US index futures from the opening of the US index futures electronic trading to the opening of the Taiwanese stock market are an important reference for investors in the Taiwanese stock market. Additionally, the paper presents an overreaction of the Taiwan Stock Exchange Capitalization Weighted Stock Index to a drastic price rise of E‐min NASDAQ 100 Index futures at the opening of the Taiwanese stock market.

This paper deletes the observations arising from the different national holidays of the USA and Taiwan, to have the same number of observations in both markets, which might contaminate the empirical results.

Investors in the Taiwanese stock market tend to pay more attention to the fluctuations in the share prices of high‐technological companies in the USA.

Most of the previous studies regarding price transmission between the Taiwanese and US stock markets focused mainly on the Taiwanese market reactions to the overnight returns of the US market. This paper enlarges the current field by examining the lead‐lag relationship, the volatility asymmetry, and the overreaction phenomenon between the Taiwanese and US financial markets according to the most updated US stock index information.

The purpose of this paper is to test opposing views of the relationship between corporate social responsibility (CSR) and stock price crash risk in a major Asian emerging stock market.

This paper suggests an endogenous relationship between CSR and stock price crash risk. Hence, this paper uses two-stage least squares regression analysis to address the bias and inconsistency associated with endogeneity issues. Moreover, previous studies argue that the level of effectiveness of corporate governance significantly affects firm-specific stock price crash risk. Thus, this paper further divides the overall sample into two sub-samples according to the median of the corporate governance index. Furthermore, this paper investigates the impact of CSR on stock price crash risk under corporate governance.

The empirical results show that CSR significantly mitigates Taiwanese stock price crash risk. This finding is consistent with the notion that socially responsible Taiwanese firms commit to a higher standard of transparency and engage in less bad news hoarding, thus reducing crash risk. The empirical results also show that CSR has a more pronounced effect in mitigating crash risk for Taiwanese firms with less effective corporate governance.

The study findings indicate that CSR plays a more important role in reducing crash risk for Taiwanese firms with weak governance mechanisms.

The house money effect is proposed to describe that people appear to consider large or unexpected wealth gains to be distinct from the rest of their wealth, and are thus more willing to gamble with such gains than they ordinarily would be. On the other hand, the availability heuristic describes that people tend to have a cognitive and systematic bias due to their reliance on easily available or associational information. The purpose of this paper is to employ these behavioral perspectives in an empirical model regarding the January anomaly to explore investor behavior in Taiwanese stock market with bonus culture and well-known electronics industry.

This study uses the conventional and standard dummy variable regression model, as employed in prior studies, and further includes some control variables for firm, industry and macro-economic level factors. Moreover, 19 industrial indices for Taiwanese stock market over the period January 1990 to December 2014 are included in this study to examine the hypotheses, except for the 1997 Asian financial crisis and the global financial crisis period of 2007-2009 to avoid the potential effect. On the other hand, the authors also use the entire sample period of 1990-2014 for understanding whether the magnitude of January effect is different.

The empirical results indicate that Chinese bonus payments in January induce a strong January effect in the Taiwanese stock market, especially when most listed firms have positive earnings growth in the preceding year, suggesting a house money effect. Moreover, this study further provides some preliminary evidence that the higher January returns due to bonus culture are apparent only in the electronics industry when both Chinese New Year and bonus payments are in January, implying the role of availability heuristic based on the electronics stocks in investor behavior before the impending stock exchange holidays. Some robust tests show qualitative support.

The major contribution of this study is to extend the existing research by incorporating cultural and industrial factors with behavioral finance, thus enriching the literature on the causes of seasonality for Asian stock markets.

This study also has behavioral implications of investments for investors in the Taiwanese stock market, especially for foreign institutional investors which pay close attention to this market.

This study first applies and examines the culture bonus hypothesis with regard to how employees who receive culture bonuses in January can change their attitudes toward risk and induce the January effect from the concept of mental accounting. Moreover, this study further proposes and examines the extended culture bonus hypothesis related to how the January effect due to culture bonus is different for the electronics and non-electronics industries when taking into account the stock market holidays from the concept of availability heuristic.

This paper focuses on Taiwanese‐funded manufacturing companies operating in mainland China to analyze the factors affecting funding decision‐making before and after initial public offering (IPO).

This research investigates the impact and usefulness of various paths in the data system by using the structural equation modeling (SEM) to examine how the overall economy aspect and the basic aspect before IPO affect the initial returns (IRs) during the IPO and the debt ratio (DR) volatility after listing.

The results show that the IR, percent change of stock index, and exchange rate volatility before IPO are negative associated with the DR after IPO. The age of IPO companies is positive associated with the DR after IPO. This research also finds that the interest rate volatility before and after IPO have no direct effect upon companies' financial strategies after IPO, but may indirectly affect companies' financial strategies after IPO through the IRs, which conform with the market information feedback hypothesis proposed by van Bommel and Vermaelen.

This paper investigates Taiwanese‐funded traditional manufacturing companies in mainland China. The paper obtains the sample from the Taiwan Stock Exchange from 1990 to 2005; electronic companies and samples lacking complete data are eliminated. Finally, the sample consists of 122 companies from traditional manufacturing sectors. The results may be applied to companies not from high‐tech sectors and emerging markets only. The incentive of debt financing would be lower for IPO companies with high IRs, percentage changes of stock index, and exchange rate fluctuation before listing. The paper suggests further research can investigate IRs for establishing an optimal capital structure to minimize financing costs and appreciate company value when choosing financing strategies. The new pubic companies will infer the IR and future capital structure through market interest before listing. It suggests future research may be directed at companies from financial and high‐tech sectors, and may apply the methodologies to developed economies.

It is suggested that IPO companies may closely examine to determine the performance of stock market, tendencies of exchange rate movement, as well as IRs in order to establish an optimal capital structure to minimize financing costs and appreciate company value. Besides, the new pubic companies will infer the IR and future capital structure through market interests before listing.

This research implicated that IPO companies should fully understand the stock market circumstance and exchange rate volatility tendencies. Then, the new pubic offering companies will be able to infer the IR and future capital structure through market interest to judge relative financing costs of manufacturing companies.

The purpose of this paper is to address the opposing views of the relationship between directors’ and officers’ liability insurance (D&O insurance) and stock price crash risk in a major Asian emerging stock market.

This paper finds an endogenous relationship between D&O insurance and stock price crash risk. Hence, the two-stage least squares regression analysis is used to address the endogeneity issue when the relationship is examined. Moreover, this paper further controls the quality of other corporate governance mechanisms to investigate whether D&O insurance still has an effect on stock price crash risk.

The effect of D&O insurance coverage is significantly negatively related to firm-specific stock price crash risk in Taiwan. More importantly, even when the quality of other corporate governance mechanisms is controlled, the negative relationship between D&O insurance coverage and firm-specific stock price crash risk remains significant. The evidence supports that D&O insurance serves as an effective external monitoring mechanism, strengthens corporate governance, and thus reduces stock price crash risk.

Emerging Asian markets suffer a dearth of research on the relationship of D&O insurance coverage and the firm-specific stock price crash risk. Investigating the relationship in Taiwan, the present study fills the research void. The findings show that D&O insurance plays an important role in reducing stock price crash risk of Taiwanese firms even when other corporate governance mechanisms are in place.

This paper explores dividend announcements based on information hypothesis. We explore in particular whether or not information signaling theory existed in Taiwan. We also explore the free cash flow hypothesis. In order to eliminate affecting factors, we target companies with irregular dividends as research samples, just like those with specially designated dividends (SDD). We examine whether or not those proceeds may be deemed as future earnings prospection. In this paper we study mainly dividend announcements made during stockholder’s meetings of the companies listed in the Taiwan Stock Exchange (TSE) or R.O.C. Over-the-Counter Securities Exchange (ROSE). We apply event study as means of analyzing abnormal returns of the companies. In addition we use the GARCH model with traditional ordinary least square to estimate the market model. The results indicate that SDDs are considered positive signals by the national exchange, TSE. In addition, we also show that the first-time SDD does transmit a positive signal to the market regarding the firm’s future cash flow, and that the SDD of no payment in the previous three years is negative. Furthermore, we prove that low Q firms have greater market reaction than high Q firms in announcement period. The free cash flow hypothesis and firm size effects could not be verified in Taiwan.

The purpose of this paper is to investigate how stock characteristics influence investor trading behavior and psychological pitfalls.

This study employs the methods of Solt and Statman (1989) and Kumar (2009) to examine investor trading activities.

Good companies do not usually have good stocks, while lottery-type stocks show better price performance than other stocks. Due to the representativeness and affect heuristics, the stocks of good companies are frequently transacted, while the low-priced stocks are infrequently transacted. Moreover, investors may display the gambler’s fallacy in the trade of stocks of good companies and the overconfidence and self-attribution bias in the trade of lottery-type stocks.

Investors trading lottery-type stocks demonstrate greater maturity than those that trade stocks of good companies; however, psychological pitfalls still dominate investor trading behavior.

The representativeness heuristic of “stocks of good companies are good stocks” results in the inclusion of stocks of good companies in a portfolio and poorer price performance, whereas the inclusion of lottery-type stocks in a portfolio brings higher returns within a short period of time.

Compared to earlier studies that focussed on the price performance of stocks of good companies and investor trading behavior in relation to lottery-type stocks, this study aims to investigate the influence of stock characteristics on price performance, trading activities, and psychological pitfalls.

Researchers continue to seek understanding of industrialization as a state managed process. How to create and implement new industries based on advanced knowledge is on the policy agenda of many advanced nations. Measures that promote these developments include national capacity building in science and technology, the formation of technology transfer systems, and the establishment of industrial clusters. What these templates often overlook is an analysis of use. This chapter aims to increase the understanding of the processes that embed new solutions in structures from an industrial network perspective. The chapter describes an empirical study of high-technology industrialization in Taiwan that the researcher conducts to this end. The study shows that the Taiwanese industrial model is oversimplified and omits several important factors in the development of new industries. This study bases its findings on the notions that resource combination occurs in different time and space, the new always builds on existing resource structures, and the users are important as active participants in development processes.