| Summary: | 碩士 === 東吳大學 === 會計學系 === 95 === R&D expenditure is the one of hi-tech indstries’ key indicators for the competitiveness, innovation ability, and operational performance. Acting as a crucial role in global IT industries, Taiwan has secured its position with the production of semiconductors, which can be referred to as the mother of all industries. Integrated circuits (IC) constitute about 90% of semiconductor components, which further compose the critical parts of electrical products. Both technology intensive and capital intensive, the semiconductor sector is not only the cornerstone of all electrical industries but an indicator of a country’s IT competence and industrial reputation. It can be inferred that Taiwan’s economic growth is associated with the development of the IC design industry. Therefore, this study focused on the IC industry to examine the correlation between R&D expenditure and a firm’s performance before and after initial public offerings (IPO).
Regression analysis was conducted on IC designing companies listed during the period between 1991 and 2004. Empirical results can be summarized as follows:
1.A significant negative correlation was observed between the proportion of R&D expenditure and net sales profits both before and after IPO, indicating that investment in R&D has a positive lag effect on a firm’s operational performance.
2.A significant positive correlation was found between capital amount and net sales profit both before and after IPO. Featuring high capital and technology intensity, IC designing firms that achieve better business performance would possess more capital and can afford higher R&D expenditure.
3.An insignificant but positive correlation was observed between shareholding ratio by the directors, major shareholders and net revenue before and after IPO. It is regulated in Taiwan that listed companies are banned to be involved in stock exchange before the disclosure of information that may affect stock price. However, insiders who take advantages of first-hand intelligence may still employ fictitious account or foreign investment to evade legal responsibilities. Hence, the empirical results obtained may not support the correlation between major shareholder’s activities and the firm’s performance during IPO.
4.An insignificant but negative correlation was found between stockholding by body corporate and net profit before IPO. However, the correlation was found to be insignificant but positive after IPO, indicating an increase in corporative stockholding. It can be induced that firms invested by juridical person would achieve better business performance. Due to time lag in the possession of intelligence between insider and corporative investors, as well as confidentiality of R&D events, even professional institutional investors can not access classified information. This accounts for the insignificant correlation between involvement by juridical person and a firm’s business performance.
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