Types of Capital Downsizing and their Performance

• Main Authors: Hsu, Chun-Hua, 許純華
• Other Authors: Hung, Chih-Young
• Format: Others
• Language: zh-TW
• Online Access: http://ndltd.ncl.edu.tw/handle/28346247658755246839

碩士 === 國立交通大學 === 科技管理研究所 === 97 === The aim of this study is to investigate the effect of capital downsizing on the performance of Taiwan’s listed firms during 1988-2007. First, three types of capital downsizing were identified. They are capital deducted to make up a lose, capital deducted by returning cash, and stock repurchases, respectively. Then, multiple regression were conducted to test the explanatory power of variable representing the types of downsizing. The empirical results are shown as below：if the variable of the business performance is the market to book value ratio, the business performance that after the capital deducted to make up a loss or capital deducted by returning cash is positive. This reason is that the capital deducted to make the profit data are arisen quickly. All index of the investment evaluation to appear positive. On the other hand, if the variable of the business performance is the basic earnings power ratio, the business performance that after the capital deducted to make up a lose is negative and the business performance that after capital deducted by returning cash is positive. Second, this study adopts Multinomial Logistic Regression to analyze the difference factors of the capital deducted will cause the firms to choose what type of capital deducted. The empirical results are indicated that the cash flow ratio or the debt ratio is higher, the firms will prefer stock purchases, not prefer capital deducted by returning cash. The size of company is bigger, the firms will prefer capital deducted by returning cash, not prefer capital deducted by make up a lose. The market to book value ratio is higher, the firms will prefer capital deducted by returning cash, not prefer stock purchases.