Compared to the previous twenty years, residential investments in the US appear more stable after the mid-1980s. Chapter 2 explores key hypotheses regarding the underlying causes. In particular, it uses estimated DSGE models to examine whether a more responsive interest rate policy stabilizes the housing market by keeping inflation in check. These estimations indeed found a policy that has become more responsive over time. Counter-factual analysis confirms that the change stabilizes inflation as well as nominal interest rate. It does not, however, find the change in policy to have stabilizing effect on real economic activity including housing investment. It finds that smaller TFP shocks make modest contributions, while the biggest contributing factor to the fall in the housing volatility is a reduction in the sensitivity of the investment to demand variations. Chapter 3 constructs a richly specified model for the housing market to examine the empirical relevance of various costs and frictions, including the investment adjustment cost, sticky construction costs, search frictions, and sluggish adjustment of house prices. Using the US national-level quarterly data from 1985 and 2007, we find that the gradual adjustment of house prices is the most important and irreplaceable feature of the model. The key to developing an optimization-based empirical housing model, therefore, is to provide a structural interpretation for the slow adjustment in house prices. Chapter 4 uses US national-level time series of residential investment, price index of new houses, consumption and interest rate to explore whether the US, as a nation, experienced a drop in the price elasticity of supply of new housing. Maximum likelihood estimations with a simple stock-and-flow model found a statistically significant drop of the elasticity from 10 to 2.2, when the quarterly data between 1971 and 2007 are split at 1985. A richer model with mechanisms of gradual adjustment also indicates such a reduction, when existing knowledge about the adjustment parameters is incorporated in the analysis. For the Federal Reserve, an inelastic supply can be a source of concern, because policy-driven demand in housing market is more likely to trigger undesirable swings in prices.

Business Angels (BAs) are wealthy individuals whose investments in entrepreneurial ventures enable them to increase the likelihood of both attracting subsequent Venture Capital (VC) and achieving long-term venture success. Unfortunately more than 95% of entrepreneurs seeking funds from BAs are unable to do so, raising questions about whether this high failure rate might be reduced. Scholars suggest the answer lies in gaining a better understanding of the investment decision process itself and identifying why opportunities are rejected at each stage of the decision process. However, the private nature of the interaction between BA and fund-seeking entrepreneur constrains our ability to observe the multistage nature of the interaction and how rejection reasons change at each stage. As a consequence, much research relies on BA’s biased post-decision recollections, which limits our ability to understand the decision process and identify opportunities for improvement. In this research we overcome these constraints by observing interactions from the reality TV show Dragons’ Den, where fund-seeking entrepreneurs pitch their early stage businesses to five BAs. During the interaction, each BA must either make an offer to invest or provide a reason for rejection. We develop hypotheses about why this complex decision evolves over several stages, and why rejection reasons change at each stage, which we then test by coding observations and decision outcomes. We draw on research in behavioral economics and decision making to propose that BAs use heuristics to reduce their decision making effort at each stage and initially examine the criteria that are easiest to retrieve. They then assesses each opportunity based on the most easily retrieved criteria and reject those they believe unlikely to achieve their aspiration level for required return, or because the risk of failure exceeds the BA’s own risk aspiration level. We propose that during subsequent stages of the interaction, each BA audits the entrepreneur’s behaviors to assess performance and relationship risk, rejecting those where the risk level exceeds their aspiration level. We use trained observers to code the information exchanges and behavioral cues provided by the entrepreneur to find support for our hypotheses. We observe that, during the venture assessment stage, BAs do reject opportunities that fail to reach aspiration levels for investment return or investment risk, however, contrary to normative assumptions we find BAs do not trade off investment risk for investment return. For opportunities not rejected, we observe BAs assess how the entrepreneur’s behaviors and decisions inform their assessment of managerial risk and increase the likelihood of venture failure. We note BAs are more likely to reject entrepreneurs whose behaviors indicate low level of capabilities, experiences or traits, while excess traits can also increase this likelihood. For opportunities not rejected at this stage, we observe BAs audit the entrepreneur’s trust behaviors to inform their assessment of the relationship risk. We find BAs more likely to reject entrepreneurs who damage or violate trust in comparison to those who build trust. We also observe that BAs invest in entrepreneurs who damage trust, but only if they can introduce appropriate behavioral controls. Our observations help explain the multistage nature of the decision process and why opportunities are rejected at each stage. We suggest that better prepared entrepreneurs who display appropriate behaviors are less likely to be rejected. Increased understanding of the decision process enables BAs to improve their decision-making, while knowledgeable policy makers will be better able to cost-effectively deploy appropriate resources to enhance funding activities. Our observations should encourage academics to further explore entrepreneurial behaviors, perhaps adapting our research method and coding schema in future research.

A Study of Venture Capitals¡¦ Investment Decision-Making and Performance in Taiwan: A Case of C Venture Capital Abstract Info-tech industry plays an important role in Taiwan¡¦s economic development, and for the last eighteen years a huge amount of capital invested in domestic high-tech industry by Taiwan¡¦s venture capitalists has been spurring capital formation of its high-tech industry. Moreover, the investment by venture capitals in earlier technology companies provides technology start-up teams with outstanding capital backup for management, which thus effectively promotes innovation and development of technology industry. Also, the provision of capital by venture capital industry, the talented technicians trained by ITRI, and the cluster of vertically related industries in Hsinchu Science-based industrial park jointly offer advantaged conditions for the development of such tech industries as semi-conductor, electronics information, and opto-electronic, which makes Taiwan one of the major manufacturing countries in global info-tech industry. However, venture capital is a high-risk, high-stakes investment industry; issues such as whether domestic venture capitalists have preferences in investment decision-making in terms of investing in high-tech companies at stages of seed, early, expansion, and mature, as well as which one¡¦s performance will be better when it comes to investing in domestic or foreign (mainly in America) high-tech companies are worth investigating. Still, little research on venture capitals was conducted to explore key decision factors for whether to invest and what factors cause investment projects to succeed or fail. Using C venture capital as a case, the primary purposes of this study are therefore to examine if there exists any one certain preferred decision factor for investment, to follow up the outcomes of investment projects, and to seek the factors of success and failure for these projects. The results of this study show that venture capitalists do prefer to invest at the stages of expansion and mature, for it is easier to predict the outcomes of investment projects. In addition, as a result of Taiwan¡¦s tech industry relocating to mainland China, venture capitalists¡¦ being still forbidden to invest in China, and the significantly decreasing number of domestic profitable projects, the ratio of increasing investment at the seed and early stages has been rising accordingly. Furthermore, it can be found that the investment performance on foreign high-tech companies is better than that on domestics, the ratio of investment continues rising year by year, and venture capital is moving toward globalization. In this study, the decision factors directing the investment decision-making of the board of directors in the case company are based on four dimensions of evaluation principles: (a) business starter & management team; (b) industry & market; (c) product & technology; and (d) financial planning & reward. The findings of this study show that investment target companies are more likely to be invested if they possess better technology platforms or patents than their competitors, or their products are more unique. But they are unlikely to be invested if their industrial future is uncertain or the product market is small. Also, according to the analysis of factors for the outcomes of investment projects, projects invested based on their advantaged conditions in the dimensions of industry & market and product & technology have better chance to succeed; while those invested due to being advantageous in the dimensions of business starter & management team, and financial planning & reward are more likely to fail. This study indicates that although the two decision factors of finance and management team have advantages, without the matching of industry & market and product & technology, high-tech industry is not necessarily able to gain profit; but if there are problems with the latter two factors, the companies will definitely fail, leading to bankruptcy and liquidation. To sum up, having advantages in both factors of industry & market and product & technology is more likely to profit a company, but only with the positive incorporation of management team and financial planning can it further ensure a company¡¦s success.

Abstract At present Taiwan is leading in the global Wafer OEM and ODM industries, and the outstanding accomplishment is growing constantly. Besides, due to the close relation between the specialized semiconductor packaging/test industries and the Wafer OEM industries, the growth rate was also similar to the Wafer OEM industries. The highly concentrated global packaging industries are gradually moving towards two-side development, big or small. Large plants, operated by group management and under shared resources, have the advantages in price negotiation and cost controls. Corporation A and B are two of the top domestic packaging/test manufacturers. At the same time, they also are No. 1 and 3 of the global specialty packaging factories. The multitudinous small factories cannot compete with these two companies on scale and growth rate. Corporation A and B still maintain the competitive advantages. Corporation C was also one of the top three packaging/test plants in the 2000s. However, in the recent years, the company did not perform as well as the overall economy. The firm has experienced massive business losses, drastic price drop in its stock. Its output was far behind the top two plants. In 2004, it became the No. 4 manufacturer, behind Corporation F. After analyzing financial ratios and investments to subsidiaries of Corporation C, this article has discovered the main reasons as to why Corporation C has changed from its flourish past to present weakness. Besides the adverse impact of the poor investment environment, they made a mistake by expanding their fixed assets without careful evaluation so the depreciation expense was too high. Moreover, their oversea investments expanded the losses because of recession, large debt amount and interest, thereby leading to the increases in bankruptcy costs. This article also discovered the decision-making quality of Corporation C and offered the improvement with the viewpoint of the Corporate Governance.

In recent years, the Build-Operate-Transfer (BOT) project has become a widespread mode for infrastructure construction. The BOT project is promoted to alleviate the government financial pressure and lead in efficiency of the private sector. There were a lot of large constructions to adopt BOT model, such as Taiwan High Speed Rail, Kaohsiung Rapid Transit System, and so forth. Self-liquidating ratio (SLR) is one of the most important indicators in evaluating a BOT project. Since the cash flow structures are different between BOT projects and projects financed solely by government, the original SLR formula is not perfectly suitable. Therefore, this study revises the SLR formula, and tries to use the new definition to construct a financial-decision model for the government and concession company. When the government administration and the concession company negotiate a concession agreement, they have to determine the investment proportion and royalty. However, traditional evaluation model, such as Net-Present Value Method, Internal Rate of Return Method, are rarely focus on the theme. As a result, there is not a appropriate standard to use. This study combines cash flow concept and linear programming method to construct financial-decision models for both sides. We expect to look for a bargain space of investment proportion and royalty. With the bargain space, the participants of BOT project can make a better investment decision, and reduce the wrong policy which may lead the waste of social resources.

The real-estate faced serious recession recently in Taiwan, it caused several famous listed constructional investment companies to result in financial crisis. The constructional investment companies made high profit due to real-estate¡¦s prosperity in the past. Currently, it, however, faces heavy pressure on business operation due to recession in the real-estate. The auto-makers in Japan accepts target costing, because it helps companies to combine the cost management and strategic goals to enhance the companies¡¦ competition. The key point of this thesis, therefore, tries to analyze the target costing that applies to constructional investment companies; and ultimately attempts to provide a conceptual system that helps the companies to make decision. The research makes some propositions based on literatures, and other sources. Secondly, the difference between the current operations and target costing is understood. The final step attempts to modify the propositions according to company interviews; and as a result, contributions are made when the constructional investment companies evaluate and implement the target costing.

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As the increase of direct investment in China, Taiwanese businessmen are encountering more and more disputes there, which makes this issue be worthy of attention. Among the various types of disputes, this present study focuses on investment disputes and attempts to figure out the types, causes and dispute resolution mechanism of investment disputes through the method of case study, literature review and expert interview. The conclusions of this study are as follows: There are 6 common types of investment disputes that Taiwanese businessmen usually encounter in China: 1. Disputes on contributing investment; 2. Disputes on the right of management¡F3. Disputes on profit distribution; 4. Disputes on suspending equity joint-ventures or contractual joint-ventures; 5. Disputes on partners¡¦ illicit behaviors; 6. Disputes between Taiwan shares holders or anonymous investment disputes. It is revealed that the causes of investment disputes are 1. China¡¦s restrictions against foreign investment; 2. Taiwanese businessmen¡¦s unfamiliarity with the investment laws and regulations of China; 3. Taiwanese businessmen are not discreet in choosing their China partners; 4. Taiwanese businessmen tend to sign contracts and building cooperation constitutions carelessly. Taiwanese businessmen resort to three kinds of dispute resolution mechanisms, including Adjudication, Mediation, and Arbitration, when encountering investment disputes in China. This study conducts a comparative analysis between these three mechanisms in terms of six dimensions, i.e. ¡§efficiency¡¨, ¡¨cost¡¨, ¡¨professionalism¡¨, ¡¨confidentiality¡¨, ¡§relationship maintenance¡¨ and ¡¨enforceability¡¨. The result shows that mediation and arbitration perform better than adjudication in almost all dimensions except the dimension of ¡§enforceability¡¨. It is also suggested that Taiwanese businessmen prefer mediation to any other dispute resolutions in practice. Since arbitration is also an excellent dispute resolution mechanism, this phenomenon implies that arbitration is ignored by the Taiwanese businessmen. Therefore, the regulation, exercise and notice of China¡¦s arbitration are further demonstrated for Taiwanese businessmen in the final part of the study.

Thesis--Copenhagen. / Errata slip inserted. Includes bibliographical references (p. [238]-246).

Thesis (Ph. D.)--University of Texas at Austin, 2002. / Vita. Includes bibliographical references. Available also from UMI Company.