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There are nine articles in this issue. Three of them are on finance, three on accounting,
two on marketing, and one on management.
The financial articles
The three financial articles are related to the role of information asymmetry or
diffusion. The first one proposes a theoretical model based on asymmetric information. It
explains the evolution of heterogeneous firms’ intertemporal banking relationship as well as
direct and indirect financing patterns. According to the model, if there is significant
(insignificant) information asymmetry and if the economy undergoes an expansion
(depression), the enterprise may have a more intensive (less intensive) banking relationship.
Moreover, the enterprise with a lower (higher) information asymmetry is more inclined to
select direct (indirect) financing arrangements, but tends to increase the level of indirect
(direct) financing during economic expansion.
Using the semiconductor industry in Taiwan as an example, the second article studies
the information disclosed by upstream firms through conference calls. The authors find that
firms’ accumulative abnormal returns are positively related to both the unexpected earnings
forecasts and nonfinancial information revealed in conference calls, as well as the echelon
distance of the firms. The result shows that firms need more time to digest the nonfinancial
information in conference calls held by their upstream firms when there is longer echelon
distance between the two firms along the supply chain.
The third article investigates the information content of open interest. According to the
article, increases in open interest are accompanied by greater trading volume, larger depth,
higher spot volatility, and lower market impact costs. The overall results support the hedging
demand hypothesis and indicate that a large open interest reflects divergence in traders’
opinions.
The accounting articles
The first article investigates the impact of corporate income tax rates reduction to firms’
dividend policies in Taiwan. The difference between corporate and personal income tax rates
increases as a result of decreased corporate tax rate, which increases firms’ incentive to
retain earnings. The empirical results suggest that the payout ratios of total dividends, stock
dividends, and cash dividends decreased significantly after the corporate income tax rate was
reduced from 25% to 17% in 2010.