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The third paper by Lin, Chung, and Yeh is a review article about the empirical studies
and applications of derivatives in Taiwan. The authors have reviewed more than 140 papers
published in TSSCI journals after the year 2000. The first part of the paper summarizes the
empirical studies of derivatives markets in Taiwan regarding futures market, options market
and market mechanism. The part of the paper reviews the literature by applying the concept
or the pricing model of derivatives to other areas such as risk management, employee stock
option, real option, business operation and so on. The authors also provide research issues
and possible directions for future research in empirical derivatives study.
The fourth article by Liao and Lee investigates the valuation relevance of information
technology (IT) expenditures for U.S. banks. Using the Ohlson (1995) model, the authors
show that the IT expenditures are significantly and positively related to market values and
the IT intensity has positive impacts on earnings’ multipliers (i.e., the persistence of
earnings).
The fifth paper by Hwang examines the evolution of China’s exchange rate regime after
the announced shift to a managed floating exchange rate regime with reference to a basket of
currencies in July 2005. The author finds that the RMB basket, consisting of 11 component
currencies, is essentially a one currency basket of the U.S. dollar. Specifically, it is shown
that the exchange rate of USD/RMB has been crawling upward in an on-and-off manner and
at a slow yet erratic rate after the regime shift. This regime seems to be the optimal and
logical choice for China because RMB exchange rate greatly affects China’s macroeconomic
stability, economic growth and employment.
One of the two operation management articles, written by Lu, Ramos and Chen,
investigates the evaluation and selection of suppliers when making a supply portfolio to
mitigate the impacts of supply disruptions. They propose the incorporation of the utility
function in the simple multi-attribute rating technique to account for buyers’ risk-taking
behavior and investigate supplier selection decisions under different scenarios of market
demand. Their proposed approach can help decision-makers evaluate their supplier options
and select the suppliers that will give the maximum utility. The major contribution of this
paper is to consider the human effects of buyers and changes in external demand which are
seldom considered in the recent literature besides of the attributes of suppliers.