| Summary: | 博士 === 國立暨南國際大學 === 國際企業學系 === 97 === The objective of this doctoral dissertation is to investigate the value relevance of intellectual capital and the effects of internationalization and audit quality on loan interest rates. This dissertation consists of three studies that may provide managerial implications. These studies are entitled “The Value Relevance of Intellectual Capital”, “The Effects of Internationalization on Loan Interest Rates”, and “The Value of Audit Quality: Evidence from Loan Pricing”, respectively.
The first study of this dissertation aims to investigate the value relevance of intellectual capital (IC). This research is motivated by the increasing gap between the market value and book value of firm’s equity and the empirical results of several studies that the joint explanatory power of earnings and book value for stock prices has decreased over time. This study uses a “two-stage” discounted residual income (DRI) model to measure firm’s IC and test it on two different country samples (142 electronics companies in the US and 239 in Taiwan). The empirical results show that a firm’s IC-measured fundamental value and fundamental P/B ratio are highly correlated with its current observed value and observed P/B ratio, respectively. In regressions of stock prices, the joint explanatory power of IC and book value is superior to that of earnings and book value. Moreover, the empirical results also document that including IC in the Accounting-based valuation model will significantly increase the explanatory power of the model for stock prices. These empirical results imply that IC has been the major part of a firm’s value in the knowledge-based economy, and that IC can powerfully explain the firm’s stock price more than earnings.
The second study of this dissertation aims to reinvestigate the effects of firm internationalization on loan interest rates as well as the relationship between firm internationalization and debt ratios with a focus on small and medium-sized enterprises (SMEs). This research is motivated by the inconclusive results of empirical studies on the effects of firm internationalization on debt costs and the relationship between firm internationalization and debt ratios, as well as by the lack of such research that focuses on SMEs in emerging markets. Using a panel sample of 1,038 SME year observations in Taiwan from 2001 to 2006, our findings indicate that an SME with a higher degree of internationalization (DOI) does pay lower loan interest rates. Our findings also indicate that the SME’s debt ratio is inversely related to its DOI, and that the average debt ratio of multinational SMEs is lower than that of domestic SMEs. These results provide empirical evidence that a higher DOI leads to lower interest rates on bank loans to SMEs and results in a lower level of debt financing by the SMEs, implying that multinational SMEs aggressively expand into international markets may enjoy more benefits from diversification and more growth opportunities, while facing higher agency costs of debt than domestic SMEs.
The third study of this dissertation aims to investigate the effects of audit quality on loan interest rates for SMEs. This research is motivated by the inconclusive results of experimental studies on how loan officers both use and perceive audited financial statements and the limited amount of direct empirical research on the value of audit quality in relation to loan interest rates. This study uses a multivariate regression to investigate the effects of audit quality on loan interest rates for SMEs. In our full sample of 1,038 annual observations in Taiwan during the period 2001-2006, the empirical results indicate that Big 4 (5) audited SMEs actually pay lower interest rates than non-Big 4 (5) audited SMEs, and that the interest rate benefit of purchasing a Big 4 (5) audit decreases as a firm’s credit rating increases. These results imply that higher audit quality does reduce the interest rates on bank loans, and a firm’s credit rating is crucial in determining the effects of audit quality on the interest rates of bank loans. Using a credit rating-matched subsample of 686 SMEs, we find that the Big 4 (5) audited SMEs’ interest rates are, on average, 8.7 basis points lower than those of non-Big 4 (5) audited SMEs. Moreover, these interest savings can cover the entire premium of Big 4 (5) audit fees and result in net benefits.
From the empirical results and managerial implications of three studies that mentioned above, it is quite obvious that the intangible IC, firm internationalization and well audit quality may increase firm’s value. Therefore, a firm should strive to enhance the creation and management of IC to enlarge its value, and the investor should invest in a portfolio of stocks whose fundamental value is obviously higher than observed value in order to get profits. Furthermore, a firm should strive to expand into international markets and enhance its audit quality in order to obtain more benefits from the lower interest rates on bank loans.
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