Corporate Governance, Professional Education, and Employee Bonus in High-Tech Industry- Evidence from Taiwan

Lin Wen Hsiang

doi:10.12973/eurasia.2017.01065a

Abstract

High-tech industry plays the role of motivator in the economic development in Taiwan, revealing that high-tech industry is not simply the most important breadwinner in Taiwan, but also the powerful backing of national competitive advantage under the globally competitive system. High-tech industry requires the engagement of excellent talents, but the staff turnover rate is commonly high. A lot of businesses therefore apply employee bonus and the high development of high-tech industry as the incentives to recruit and retain talents. In this case, it is important for high-tech industry understanding the factor in employee bonus and further discussing the relationship among current corporate governance mechanism, professional education, and employee bonus for the sustainable development. Taking domestic listed high-tech companies as the research objects, the database of Taiwan Economic Journal and Taiwan Patent Gazette are the data sources to collect the companies’ financial statement, patent, and stock price data for the empirical research. The research results conclude the significantly positive correlations between 1) corporate governance and employee bonus, 2) professional education and corporate governance, and 3) professional education and employee bonus. Finally, conclusion and suggestions are proposed, expecting to assist high-tech businesses in promoting the employee bonus system.

Highlights

In order to reinforce national competitiveness to facilitate the industrial transformation in Taiwan, electronics industry is positively developed as the major niche of national competitiveness
A high-tech could provide the work environment, which allows the employees develop what they learn in the professional education to enhance the professional capability being effectively applied
The common evaluation indicators for the internal quality of model in LISREL contain (1)square multiple correlation (SMC) of individual manifest variables, as R2 of manifest variables and latent variables, which should be larger than 0.5, (2)component reliability (ρ) of latent variables, as the Cronbach’s α of observation indicator of latent variables, which is better larger than 0.6, (3)average variance extracted of latent variable, calculated by the sum of manifest variables R2 of a latent variable divided by the number of manifest variables, revealing the percentage of the latent variable being measured with manifest variables, which is better larger than 0.5

Summary

INTRODUCTION

In order to reinforce national competitiveness to facilitate the industrial transformation in Taiwan, electronics industry is positively developed as the major niche of national competitiveness. Qian & Yeung (2015) discussed the positive correlation between employee bonus and corporate governance and discovered that the higher employee bonus would have a company tend to giving more stock dividends and reduce the percentage of cash dividends. For this reason, the following hypothesis is proposed in this study. Habib et al (2013) stated that professional education had the cultivation of management talents not stress on the unification of knowing and doing or the unification of theory and practice, but emphasize the cultivation of professional ethics, broad knowledge, and critical thinking and capability to comprehensively enhance the application of talents in the corporate governance. H3: Professional education reveals notably positive correlations with employee bonus

Method Model

Result

CONCLUSION AND SUGGESTION