The Relevance of Innovation Capital, Audit Quality and the Cost of Debt－the Evidence from Taiwanese Small and Medium－sized Enterprises

• Main Authors: Chiu, Huichen, 邱慧貞
• Other Authors: Tsai, Hsuehchang
• Format: Others
• Language: zh-TW
• Published: 2012
• Online Access: http://ndltd.ncl.edu.tw/handle/20230819982382259616

碩士 === 靜宜大學 === 管理碩士在職專班 === 100 === In the globalized business environment nowadays, ample capital is the crucial factor of success of enterprise’s operation and development. The main source of raising the capital is either managing cash capital increase or borrowing money (including bank loan and issuing corporate bonds). However, whether a significant correlation exists between debt capital cost and enterprise innovation capital, audit quality, or credit rating is worthwhile for our exploration. Hence, the research’s purpose was to utilize Multiple Regression Analysis to test and verify the correlation between debt capital cost and Taiwan’s small and medium enterprises’ innovation capital or audit quality. The research took Taiwan’s small and medium enterprises whose stocks had been available for transaction in the OTC market or pre-listed market as the research subjects (not including the financial and insurance industry), and the research period was from 2001 to 2009. The research took an sample enterprise R&D expenses’ percentage in total sales amount as the substitution variable of enterprise innovation capital, took whether the sample enterprise hired four major (or five major) accounting firms to check accounts and do attestation as the measurement index of audit quality, and used Multiple Regression Analysis to examine three hypotheses established by this research, in order to explore the influence of Taiwan’s OTC-listed small and medium enterprises’ innovation capital, audit quality, and credit rating on debt capital cost by means of it. The results of the empirical research showed that Taiwan’s small and medium enterprises’ innovation capital was indeed significantly negatively correlated with debt capital cost, and so did the audit quality. Besides, the research also discovered that Taiwan’s small and medium enterprises’ credit rating was significantly positively correlated with debt capital cost. The research’s empirical results not only provided empirical evidence of the correlation between debt capital cost and Taiwan’s small and medium enterprises’ innovation capital, audit quality, or credit rating, but also offered valuable management connotation for the authorities that governed Taiwan’s small and medium enterprises and for the financial institutions: 1. Small and medium enterprises shall strengthen the investment in intellectual capital and elevation of audit quality in order to lower an enterprise’s debt capital cost; 2. In the financing decision for small and medium enterprises, a financial institution shall consider the innovation capital investment degree of the enterprise that applies for a loan and the condition of the audit quality and credit rating at the same time as the reference basis of formulating the policy decision of financing rate and line of approved loan, so as to provide steady developing small and medium enterprises the most timely and effective financial support and achieve and create win-win vision.