Graduation Year
2023
Date of Submission
12-2022
Document Type
Campus Only Senior Thesis
Degree Name
Bachelor of Arts
Department
Economics-Accounting
Reader 1
Matthew Magilke
Terms of Use & License Information
Rights Information
Christopher P Wicke
Abstract
This paper analyzes if the deterioration of relations between China and Taiwan and the possibility of war has affected the accounting decision making process of businesses in Taiwan. The two possible methods proposed and tested for in this paper which businesses could use to prepare for a future war are in changing their allocation of capital expenditures and their choices regarding their research and development expenses. Violations of Taiwan’s Air Defense Identification Zone (ADIZ) by the People’s Liberation Army Air Force are used as an indicator of tensions, and along with control variables are regressed using OLS panel regressions against firms’ CAPEX and R&D expenses. ADIZ did not show statistical significance in the regression on CAPEX but did for R&D, although the magnitude was not great. This study was limited by some restrictions on data, so future analysis as well as additional retrospection on past conflicts may be productive in more definitively establishing how firms prepare for war or conflict.
Recommended Citation
Wicke, Christopher, "Do Businesses Account for the Threat of War? An Analysis of the Ongoing Conflict between China and Taiwan" (2023). CMC Senior Theses. 3162.
https://scholarship.claremont.edu/cmc_theses/3162
This thesis is restricted to the Claremont Colleges current faculty, students, and staff.
