A Empirical Study of Du Pont Identity and Stock Pricing Model under Corporate Governance and Market Mechanism Variables: The Perspective of Publicly Listed Electronic Companies in Taiwan.

• Main Authors: Wen-Chang Chen, 陳文章
• Other Authors: 倪衍森
• Format: Others
• Language: zh-TW
• Published: 2006
• Online Access: http://ndltd.ncl.edu.tw/handle/95640087620098033189

碩士 === 淡江大學 === 管理科學研究所企業經營碩士在職專班 === 94 === Security issuers follow the regulation of fair disclosure will contribute to a state of dynamic information equilibrium in the market and at the same time meet the principle of fairness. However, it is inevitable that security issuers may selectively disclose the information in the market, which would result in information asymmetry. When the individual investors could not obtain the correct investment information, they would invest blindly and make losses due to misjudgment of the situation. Since individual investors usually cannot obtain complete investment information, they may just change their investment strategies and look for other potential valuable investment objectives based on the past experiences and historical track records. Therefore, the study is based on the theoretical concept of Du Pont identity and stock pricing model to examine factors that would affect company performance, operating risk and market value. The factors include non-financial factors, corporate governance and market mechanism. Meanwhile, the data of domestic electronic companies listed in TSEC and OTC are used for multiple regression analysis. The purpose of the study is to provide individual investors references for future investment decision-makings. The empirical results of the study are as follows: 1.According to Du Pont identity, debt ratio and operating efficiency have significant relationships with a company’s performance. But it depends on the profitability ability to determine if the company’s performance is improved. 2.Profit margin is the symbol of a company’s persistent and long-term profitability. The extent of margin fluctuation is related to the stability of a company’s operating performance. Based on the empirical result, the profit margin standard deviation has a negative relationship with the company’s performance. Thus, it would be helpful in investment decision making if the profit margin standard deviation is considered as a benchmark for observing the operating risk. 3.Theoretically, the establishment of corporate governance mechanism should increase a company’s operating transparency to avoid management fraud. The company, in the mean time, can improve performance so as to sustain through the built-up mechanism. Therefore, the level of corporate governance has a significant relationship with the company’s performance. 4.Pledged shares ratio of director and operating risk are positively related. Moreover, debt ratio and pledged shares ratio of director move toward the same direction. 5.The change of profitability, risk and growth is the main factor that affects a company’s market value. In addition, short sells and short interest utilization ratio are significantly related to the market value. However, there is no statistically significant relationship between the level of corporate governance and market value.