Wen-Chung Guo

Stock bonus compensation and firm performance in Taiwan

Purpose – The main purpose of this paper is to investigate the relative firms’ performances of equity-based compensation schemes using a panel regression approach from Taiwanese experience. Design/methodology/approach - Previous theory considers executive stock options as an important input in the production process, but the empirical support for the performances of equity-based compensation schemes is mixed in developed countries. This paper uses a panel data regression to analyze the influence of stock bonus and executive stock option on performance. Findings - The evidences in Taiwan suggest that there exist positive associations between the amount of stock bonuses and firms’ operating performance. It is also found that firms with larger firm size or high growth opportunity tend to adopt stock bonus. Research limitations/implications - The first limitation is that we the dataset over our sample period 1999-2001 is still incomplete because the executive stock options allowed by the regulation are not prevalent in Taiwan over that period. The second limitation is the unique stock bonus system in Taiwan is not observed for developed countries. Practical implications - The result imply a positive association between stock bonus and firms operating performance. Companies with well-designed bonus compensation may lead to better performance. Originality/value - The unique stock bonus compensation schemes in Taiwan are used in general to contribute to the success of the high-tech companies. This paper first addresses the importance of the stock bonus on compensation issue for high-tech companies. This added knowledge is beneficial to practitioners and academics whose interest lies in equity-based compensation and performance.

A study on intellectual capital and firm performance in biotech companies

This article attempts to understand the influence of intellectual capital on the performance of biotech firms. It provides an integrated framework to clarify the inter-relationship between compensation scheme, human capital and financial performance of listed biotech firms. The sample studied includes 279 biotech firms listed in the US market for the period 1994 to 2005. The results show that the association between patents and Research and Development (R&D) expenditure is found to be positive, although the increase in patents did not significantly improve the accounting performance. The quality of human capital, measured by several factors, is expected to play a positive role in technology innovations and financial performance.

Prices, Locations and Welfare When an Online Retailer Competes with Heterogeneous Brick-and-Mortar Retailers

This study proposes a novel spatial model in which an online retailer competes with heterogeneous brick‐and‐mortar retailers. Consumers are assumed to be non‐uniformly distributed along an urban‐rural line, and online transactions provide savings in transportation costs at the expense of distaste costs. Among other results, we show that the surviving brick‐and‐mortar retailers eventually move toward densely populated (urban) areas after the entry of the online retailer. Consumer welfare, the policy of not taxing online business, and the socially optimal number of retailers are also analyzed.

Nesting Horizontal and Vertical Differentiation with Location Choices

This study solves a location‐then‐price game in which horizontal and vertical differentiation are combined using an asymmetric distribution of consumers’ taste. Boundary locations are robust when the taste disparity of the population is not large and out‐of‐market locations are not allowed. Firms may have incentives to move either inside or outside the market in other situations, so the equilibrium prices are never differentiated. The restrictions of vertical differentiation under this framework are further examined. A model with the entrance of a vertically differentiated product is also discussed.