| Summary: | 碩士 === 國立政治大學 === 財務管理研究所 === 99 === The case, UMC assisted HeJian in 2001, revealed the conflict between regulation and investment decision of company. It was sued in 2005, and finally became inno-cent in 2010. This essay focuses on two issues, international investment and corporate governance.
International investment started from the top-down analysis: from microeco-nomic analysis to industry to company fundamental analysis, then also the competitor analysis. Although the global IC industry had suffered recession in 2001, IC demand from China had increased. Therefore, many foreign investors transferred their know-ledge and facilities to assist China’s IC market, and then many potential competitors showed up. Meanwhile, IC enterprises in Taiwan needed large market to support R&D expense to maintain competitive advantage. As one of IC manufacturers in Taiwan, UMC didn’t have the leading technology as TSMC did, therefore, with the benefit of the high demand IC market in China, remaining competitive advantage, comparative advantage, and so on. UMC decided to assist HeJian in privately.
The problem of corporate governance emerged because of private assistance. It was doubted that the ownership structure, function of board, the interest of shareholders and transparency could work well. Therefore, when investors knew the information of UMC assisted HeJian, there was negative cumulative abnormal return by event study.
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