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Are social, financial, and human capital value enhancing? Evidence from Taiwanese firms

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  • Doong, Shuh-Chyi
  • Fung, Hung-Gay
  • Wu, Jr-Ya

Abstract

This study examines the effects of social, financial, and human capital on the financial performance (i.e., Tobin's q) of Taiwanese firms in 2007. We find that social capital, as measured by total lending and borrowing among related-party transactions, has a positive effect on a firm's value. Human capital, such as employee productivity and research and development (R&D), also has significant positive effects on financial performance. In addition, a higher firm value is found to be associated with a better credit rating for the firm.

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Bibliographic Info

Article provided by Elsevier in its journal International Review of Economics & Finance.

Volume (Year): 20 (2011)
Issue (Month): 3 (June)
Pages: 395-405

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Handle: RePEc:eee:reveco:v:20:y:2011:i:3:p:395-405

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Web page: http://www.elsevier.com/locate/inca/620165

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Keywords: Social capital Financial capital Human capital Taiwanese firms;

References

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  1. Myers, Stewart C. & Majluf, Nicolás S., 1945-, 1984. "Corporate financing and investment decisions when firms have information that investors do not have," Working papers 1523-84., Massachusetts Institute of Technology (MIT), Sloan School of Management.
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  4. Gleason, Kimberly C. & Lee, Chun I & Mathur, Ike, 2002. "Dimensions of international expansions by US firms to China: Wealth effects, mode selection, and firm-specific factors," International Review of Economics & Finance, Elsevier, vol. 11(2), pages 139-154, May.
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  8. Stewart C. Myers & Nicholas S. Majluf, 1984. "Corporate Financing and Investment Decisions When Firms Have InformationThat Investors Do Not Have," NBER Working Papers 1396, National Bureau of Economic Research, Inc.
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  10. Murphy, James T., 2002. "Networks, Trust, and Innovation in Tanzania's Manufacturing Sector," World Development, Elsevier, vol. 30(4), pages 591-619, April.
  11. Peter D. Sherer, 1995. "Leveraging human assets in law firms: Human capital structures and organizational capabilities," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 48(4), pages 671-691, July.
  12. Dong, Jing & Gou, Yan-nan, 2010. "Corporate governance structure, managerial discretion, and the R&D investment in China," International Review of Economics & Finance, Elsevier, vol. 19(2), pages 180-188, April.
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