J Bus Ethics (2015) 130:223–230
DOI 10.1007/s10551-014-2339-9
Value Relevance of Tobin’s Q and Corporate Governance
for the Taiwanese Tourism Industry
Mao-Chang Wang
Received: 22 March 2014 / Accepted: 22 August 2014 / Published online: 4 September 2014
Ó Springer Science+Business Media Dordrecht 2014
Abstract For knowledge- and invention-based industries,
scholars have introduced the firm value, which is composed
of traditional financial capital and intangible intellectual
capital, and Tobin’s Q, which is the commonly used
approach for intellectual capital valuation. Scholars have
thus evaluated firm valuation appropriately by considering
corporate governance. This study applies the multi-
regression model to present a discussion on the value rel-
evance of intellectual capital and corporate governance
concerning the tourism industry in Taiwan. The results
show that intellectual capital is positively related to firm
valuation, and that corporate governance influences the
positive relationship between intellectual capital and firm
valuation. The tourism industry must focus on intellectual
capital and corporate governance.
Keywords Tobin’s Q  Intellectual capital  Corporate
governance  Firm valuation  Tourism industry
JEL Classification G32  G34
Introduction
In a knowledge-based economy, firms’ values of the tour-
ism industry and knowledge-based industries have changed
from traditional tangible assets to intangible assets, which
are mainly intellectual capital. Creating and managing
intellectual capital has thus become the competitive
advantage of knowledge-based industries and firms.
M.-C. Wang (&)
Department of Accounting, Chinese Culture University, 55, Hwa
Kang, Road, 11114 Taipei, Taiwan
e-mail: wmaochang@yahoo.com.tw
Therefore, intellectual capital in firm valuation is espe-
cially important. Under pressures of globalization, market
liberalization, and lower profit margins, firms maintain or
make the most efficient use of relevant expenditures related
to firm value, including research and development, brand
loyalty, human resources, and marketing channels.
According to Morgan Stanley’s research, average stock
prices in worldwide securities markets are twice that of
book values (Lev 2001). This gap indicates that accounting
approaches have not considered intellectual capital valua-
tion. Roos et al. (1998) mentioned that firm value is
comprised chiefly of traditional financial capital and
intangible intellectual capital. Lev (2001) indicated that
physical and financial assets are merely used to create
normal investment returns. Intellectual capital alone can
increase the abnormal returns of firms. Lev also argued that
knowledge-intensive firms in need of financing increase
their capital cost if they are unable to disclose their intel-
lectual capital appropriately. Investors systematically
underestimate the value of these intangible asset-concen-
trated firms, and reduce firm investment and growth.
Scholars have indicated that Tobin’s Q is the most common
approach for intellectual capital valuation in the finance
field (Su et al. 2006).
Since 1998, a series of corporate frauds have been
uncovered in Taiwan (Yeh et al. 2002). Efforts from the
Taiwan stock exchange, the Securities and Futures Institute
of the Republic of China, and the Taiwan corporate gov-
ernance association have resulted in the implementation of
systems of independent directors and audit committees.
The ‘‘Corporate Governance Best-Practice Principles for
listed firms’’ aimed to enhance corporate governance and
increase international competitiveness. In 2006, revisions
to Company Law and the Securities Exchange Law
enforced corporate governance legally (Securities and
123
224
Futures Institute 2010). Scholars have addressed the
important elements of corporate governance, including the
director board size, the percentage of independent direc-
tors, the percentage of managers concurrently acting as
directors, the percentage of directors’ holdings, the per-
centage of external shareholders’ holdings, and the devia-
tion degree between control right and cash-flow right.
McKinsey & Company found that investors in Asian
countries paid a 20 % premium on stock prices of firms
with good corporate governance in 2000 (Yeh et al. 2002).
The 1997 financial crisis in Asia and the accounting
scandals of U.S. corporations since 2001, such as those of
Enron and WorldCom, have shown the importance of
considering corporate governance in firm valuation (Chen
et al. 2005).
The tourism industry is one of the strongest industries
worldwide, and has become a major part of economic
development for numerous countries. The tourism indus-
tries are springing from assets based on knowledge; such
assets are defined as intellectual capital. Knowledge
economy can be defined as an economy guided and
directed by knowledge. Unlike for the traditional economy
in which tangible assets leverage the tourism industry,
today knowledge economy is the main driving force behind
the tourism industry (Helena and Tanja 2007). Future types
of popular traveling will be slow tourism, adventure tour-
ism, medical tourism, vacation, and real estate tourism.
According to the World Tourism Organization, 83 coun-
tries rely on the tourism industry as export items; more-
over, more than 38 % of the 83 countries regard the
tourism industry as their chief source of foreign exchange.
The ten best international tourism income countries include
the United States, Spain, France, Italy, Great Britain,
China, Germany, Australia, Austria, and Greece (Cook
et al. 2010). A report by the World Forum indicated that
international tourism revenue in Taiwan was 1.34 % of the
GDP in 2009, and estimated that international tourism
revenue in Taiwan would constitute more than 2 % of the
GDP in 2012. Taiwan has included the tourism industry as
one of the six new crucial industries, indicating that the
government values the tourism industry for its influence on
the national economy (Mao 2009). Therefore, the impor-
tance of the tourism industry can be inferred. Because
intellectual capital valuation, firm valuation, and corporate
governance are closely related to country competitiveness,
tourism industry, and the individual firm, they are signifi-
cant research topics for academics and firm operations.
This paper uses the tourism industry in Taiwan as a
sample and presents a discussion on the relevance of
intellectual capital, firm valuation, and corporate gover-
nance by multi-regression model. The potential contribu-
tions of this paper include (a) Examination of the value
relevance on Tobin’s Q, (b) examination of the moderating
123
M.-C. Wang
effect of corporate governance on Tobin’s Q, include six
variables of corporate governance, such as director board
size, percentage of independent directors, percentage of
managers as concurrent directors, percentage of director
holdings, percentage of external shareholder holdings, the
deviation degree between control right and cash-flow right,
and (c) using Taiwanese tourism industry as a non-US
sample framework. The results can compensate for the lack
of research on this topic and provide a reference for pro-
motion and development of intellectual capital and cor-
porate governance for the Taiwanese tourism industry.
Literature Review and Hypothesis Development
Firm’s Value and Intellectual Capital
Stewart (1997) argued that intellectual capital is the sum-
mation of all knowledge and capabilities of everyone able
to create competitive advantage in a firm. Edvinsson and
Malone (1997) fragmented firm value into financial capital
and intellectual capital. Intellectual capital is further divi-
ded between human capital and structural capital, related to
complementary and causal, and in turn producing com-
petitive advantages for firms. Bradley (1997) argued that
book values and market values are significantly different
for numerous knowledge- and invention-oriented firms.
Lev and Zarowin (1999) found that usefulness of financial
information over the past 20 years has declined consider-
ably, mainly because financial information has not reflected
the change in business activities. For instance, outlays of
expensed research and development expenditures do not
recognize future economic benefits as assets. This paper
considered the effect of intellectual capital on appraising
firm’s value. Hormiga et al. (2011) have analyzed the
influence of the proposed intellectual capital on the success
of newly created organizations, acknowledging the key role
of the human and relational capital in the first few years of
the life of the business. Chauvin and Mark (1993) examine
the relation of advertisement, R&D expenditure, and firm’s
market value, and it shows that the firms that report the
expenditures of advertisement and R&D experience posi-
tive valuation in security market. O’Donnell et al. (2003)
adopt a case study to measure the firm’s value of intel-
lectual capital, showing that the firm’s chief executive
officer or chief financial officer believes that 60 % of firm’s
value is constituted by intellectual capital, up to 50 % is the
human capital, and external structure capital and internal
structure capital are 30 and 20 %, respectively. Wang
(2013) find that Tobin’s Q, Knowledge Capital Earnings,
and Value Added Intellectual Coefficient have a positive
relationship to firm value for the information and electronic
industry in Taiwan. Helena and Tanja (2007) find that the
Value Relevance of Tobin’s Q and Corporate Governance
intellectual capital had a significant impact on financial
performance, and suggests that Slovenian hotel manage-
ment should improve intellectual capital by investment in
human capital and information technology.
Although research and practice of intellectual capital
has not gained popularity in the hotel industry until
recently, for the last decade, hotel operations have recog-
nized the importance of managing intellectual resources for
gaining and sustaining competitive advantage; new
opportunities in the hotel industry are created from
knowledge-based assets, and such assets are defined as
intellectual capital (Taegoo et al. 2011). In other words,
investors considering both intellectual capital and financial
capital lead to accurate appraisal of firm valuation.
Researchers have proposed Tobin’s Q to measure intel-
lectual capital (Su et al. 2006). Tobin introduced Tobin’s Q
in 1968. The formula is the asset’s market value divided by
the asset’s replacement cost. Chung and Pruitt (1994)
proposed a revised formula that approximates Tobin’s Q:
ðMarket value of equity þ Book value of liabilitiesÞ=
Book value of total assets:
The advantages of this formula are that it reduces dif-
ferences in accounting methods adopted by various firms,
easily obtaining differing considering-standards of intel-
lectual capital and required information; therefore, aca-
demic researchers use the revision formula widely.
Firm Value and Corporate Governance
Agrawal and Knoeber (1996) indicated that corporate
governance should consider characteristics of the director
board and equity structure to enhance the operating per-
formance and value of firms. Using listed electronics firms
in Taiwan as research samples, Chen et al. (2005) included
the excluded information of financial statements, such as
corporate governance, into Ohlson’s equity valuation
model. His conclusion was that the corporate governance
variable leads to a more complete equity valuation model.
The results of prior studies on the size and independence of
the director board differ. Eisenberg et al. (1998) and Abbott
et al. (2004), in their investigation on director board size,
found that many directors reduce decision efficiency easily;
therefore, director board size is negatively related to firm
value. Jensen (1993) and Andres et al. (2005) found that
the relationship between director board size and firm value
depends on costs and benefits, and do not have consistency
conclusion. Al-Najjar (2014) found larger director board
enhanced firm profitability, but smaller director board was
more efficient in stock performance. So, this paper infers
that director board size has a positive or negative effect on
intellectual capital valuation associated with firm value.
225
Regarding non-executive directors, Vafeas (2005) found
that a higher number of non-executive directors on the board
resulted in greater financial information quality. Ahmed and
Duellman (2007) found that a higher number of non-exec-
utive directors indicated more conservative corporate
accounting. Hence, better corporate governance has a posi-
tive effect on firm value. However, Agrawal and Knoeber
(1996) found that a higher number of non-executive direc-
tors results in a more negative effect on firm performance
and firm value. Concerning independent directors, Bedard
et al. (2004) and Whidbee (1997) found that the independent
director is positively related to firm value. Al-Najjar (2014)
found director board independence is positively related to
firm performance and stock performance. However, Core
et al. (1999) mentioned that the director board with a higher
percentage of independent directors pays higher salaries to
management, thus decreasing firm value. So, this paper
infers that the percentage of independent directors has a
positive or negative effect on intellectual capital valuation
associated with firm value.
The study on manager as concurrent director by Brickley
et al. (1997) found that the general manager as concurrent
director could lead to a concentration of power; therefore, it
had an advantageous effect on operating performance and
firm value. In contrast, Core et al. (1999) found that the
general manager as concurrent director could lead to poor
corporate governance; thus, it had a disadvantageous effect
on operating performance and firm value. So, this paper
infers that the percentage of managers as concurrent direc-
tors has a positive or negative effect on intellectual capital
valuation associated with firm value. La Porta et al. (2002)
and Leuz et al. (2003) argued that, with a greater deviation
degree between control right and cash-flow right, controlling
shareholders tend to disfavor other shareholders. So, this
paper infers that the deviation degree between control right
and cash-flow right has a negative effect on intellectual
capital valuation associated with firm value.
For the percentage of director holdings, Jensen and
Meckling (1976) and Crutchley et al. (2002) found that a
more stable director board resulted in better firm supervi-
sion. Therefore, the percentage of director holdings is
positively related to firm value. However, Jensen and Ru-
back (1983) posited that, with a higher percentage of
director holdings, directors and managers tend to act with
self-interest and have a negative effect on operating per-
formance and firm value. In the study on external share-
holders not employed as the firm’s director or manager,
Denis (2001) mentioned that a higher percentage of
external shareholder holdings meant better corporate gov-
ernance, with a positive effect on the operating perfor-
mance and value of firms. However, Demsetz and Lehn
(1985) found that the percentage of external shareholder
holdings was not related to the operating performance and
123
226 M.-C. Wang

value of firms. So, this paper infers that the percentage of Table 1 Explanation of Variables
director holdings or percentage of external shareholder Variable name Code Definition
holdings has a positive or negative effect on intellectual
capital valuation associated with firm value. Stock price per share P Stock price per share at the
(Dependent variable) end of the fiscal year
Hypothesis Development Book value per share BV Book value per share at the
end of the fiscal year
Earnings per share EPS Earnings per share at the end
As mentioned, prior studies found that, in corporate gov- of the fiscal year
ernance, director board size, percentage of independent Tobin’s Q TOBIN (market value of
directors, percentage of directors as concurrent managers, equity ? book value of
percentage of director holdings, and percentage of external liability) divided by book
shareholder holdings are positively or negatively related to value of total assets
firm value. The deviation degree between control right and Director board size DSIZE Total seats on the director
board
cash-flow right are also negatively related to firm value.
Percentage of ID The number of independent
Intellectual capital explains the variance between a firm’s independent directors directors divided by the
market value and book value. This paper considers intel- total number of directors
lectual capital an essential part of firm valuation, and Percentage of managers MD The number of directors
establishes seven hypotheses, as follows: as concurrent directors holding a concurrent post as
managers divided by the
Hypothesis 1 Intellectual capital valuation is positively total number of directors
associated with firm value. Percentage of director DHOLD The number of shares held by
holdings directors divided by the
Hypothesis 2 Director board size has a positive or neg- total number of shares
ative effect on intellectual capital valuation associated with outstanding at the end of the
firm value. year.
Percentage of external EHOLD The number of shares held by
Hypothesis 3 The percentage of independent directors shareholder holdings the external shareholders
has a positive or negative effect on intellectual capital divided by the total number
valuation associated with firm value. of shares outstanding at the
end of the year.
Hypothesis 4 The percentage of managers as concurrent External shareholders are
directors has a positive or negative effect on intellectual defined as individual
capital valuation associated with firm value. shareholders or corporate
shareholders that do not
Hypothesis 5 The percentage of director holdings has a take director or manager
positions in sampled firms,
positive or negative effect on intellectual capital valuation and they are not
associated with firm value. representatives of the non-
affiliated firms and relatives
Hypothesis 6 The percentage of external shareholder of the aforementioned
holdings has a positive or negative effect on intellectual people.
capital valuation associated with firm value. Deviation degree between DEV Shares controls right–
control right and cash- Earnings distribution right
Hypothesis 7 The deviation degree between control flow right
right and cash-flow right has a negative effect on intel- Firm size SIZE The opening market value by
lectual capital valuation associated with firm value. taking its logarithmic value.

This paper used Tobin’s Q to appraise intellectual capital.

Tobin’s Q and the interaction variable of Tobin’s Q and
corporate governance as a substitute for other variables in
Ohlson’s equity valuation model. In summary, the scope of
the current research is restricted to the relevance of intel-
lectual capital and firm value or performance, or the rele-
vance to corporate governance and firm value or
performance with the service industries. The equity valua-
tion model of a firm is the function of three variables: the
book value of equity, the period earnings, and the firm’s
future benefits that are modified based on other information
(Ohlson 1995; Aboody 1996; Chen 2003). This paper uses
Taiwanese tourism industry as a sample and presents a dis-
cussion on the relevance of intellectual capital, firm valua-
tion, and corporate governance by multi-regression model.
Research Methodologies
The following sections explain the research period, sample
selection, variable definitions, and research model.

123
Value Relevance of Tobin’s Q and Corporate Governance
Research Period and Sample Selection
The sample is extrapolated from listed firms in Taiwanese
tourism industry from the end of the fiscal year 2008 to
2011, and these firms are related to hotels, resorts, restau-
rants, and entertainment facilities. After removing incom-
plete samples, the final sample consists of 253 observations
with complete data for analysis. Data sources were
obtained from databases of the Taiwan Economy Journal,
firm’s website and the Market Observation Post System.
Variable Definitions
Table 1 summarizes the meaning of the variables. The
research variables of this paper include Tobin’s Q (TO-
BIN), director board size (DSIZE), percentage of inde-
pendent directors (ID), percentage of managers as
concurrent directors (MD), percentage of director holdings
(DHOLD), percentage of external shareholder holdings
(EHOLD), and the deviation degree between control right,
and cash-flow right (DEV). To enhance specification of the
regression model, the research model adds firm size as a
controlling variable to represent missing variables that
must be controlled; therefore, stock price uncertainty is
expected (Ghosh and Moon 2005).
Research Model
The research model is as follows:
Pi;t ¼ a0 þ a1 BVi;t þ a2 EPSi;t þ a3 TOBINi;t þ a4 TOBINi;t
 DSIZEi;t þ a5 TOBINi;t  IDi;t þ a6 TOBINi;t
 MDi;t þ a7 TOBINi;t  DHOLDi;t þ a8 TOBINi;t
 EHOLDi;t þ a9 TOBINi;t  DEVi;t þ a10 SIZEi;t þ ei;t
where Pi,t is the stock price per share, BVi,t is the book
value per share, EPSi,t is the earnings per share, TOBINi,t is
the Tobin’s Q, TOBINi,t 9 DSIZEi,t is the interaction of
Tobin’s Q and director board size, TOBINi,t 9 IDi,t is the
interaction of Tobin’s Q and percentage of independent
directors, TOBINi,t 9 MDi,t is the interaction of Tobin’s Q
and percentage of managers as concurrent directors,
TOBINi,t 9 DHOLDi,t is the interaction of Tobin’s Q and
percentage of director holdings, TOBINi,t 9 EHOLDi,t is
the interaction of Tobin’s Q and percentage of external
shareholder holdings, TOBINi,t 9 DEVi,t is the interaction
of Tobin’s Q and deviation degree between control right
and cash-flow right, and SIZEi,t is the firm size.
The research model proposed in this study uses TO-
BINi,t to examine Hypothesis 1, and TOBINi,t 9 DSIZEi,t,
TOBINi,t 9 IDi,t, TOBINi,t 9 MDi,t, TOBINi,t 9 DHOLDi,t,
TOBINi,t 9 EHOLDi,t, TOBINi,t 9 DEVi,t are used to
227
examine Hypothesis 2 to Hypothesis 7, to determine whether
corporate governance affects intellectual capital valuation.
Results and Discussion
This section consists of two subsections that detail the
empirical analysis, including descriptive statistics analysis
and a discussion on regression analysis.
Descriptive Statistics Analysis
Table 2 shows the descriptive statistics of the samples. To-
bin’s Q of sampled firms ranged from 0.63 to 6.06, with a
mean of 1.48, indicating that market equity value and the
book value of liabilities was 48 % greater than the book
value of total assets for sampled firms. This variance indi-
cates that the accounting information ignored the firm’s
intellectual capital valuation. The director board size ranged
from 3 to 16, with a mean of 6.57, showing the variance in
director board size. The percentage of managers as con-
current directors, the percentage of external shareholder
holdings, and the deviation degree between control right and
cash-flow right are the corporate governance variables with
the smallest value of zero, with a median of 0.06, 0.10, and
0.05. Over half the sampled firms hired managers as con-
current directors, introduced external shareholders to invest,
and deviated between control right and cash-flow right. The
largest value in the percentage of independent directors was
0.43 with a median of zero, showing that sample firms hired
less than half the independent directors. The percentage of
director holdings ranged from 0.07 to 0.71 with a mean of
0.32, showing that the difference from the smallest to the
largest value was as much as 10 times. The coefficient of
variations of Tobin’s Q and corporate governance variables,
such as director board size, percentage of independent
directors, percentage of managers as concurrent directors,
percentage of director holdings, percentage of external
shareholder holdings, deviation degree between control
right and cash-flow right, were higher than 25 %, showing
the variance in Tobin’s Q and corporate governance vari-
ables for the tourism industry in Taiwan.
Regression Analysis
This study involved applying the augmented Dickey–Fuller
(ADF) test for examining the unit root test for all variables.
The results showed that the t value of the ADF test ranged
from -19.01 to -5.23 and yielded a statistical significance
of 1 %, and thus, the null hypothesis of unit root can be
rejected, indicating that the variables met the stationary
assumption. The extreme values problems in this study
123
228 M.-C. Wang

Table 2 Descriptive Statistics Variable Smallest Largest Median Average Standard deviation Coefficient of variations (%)

P 2.00 289.39 17.80 31.46 47.57 151.21

BV 6.43 50.61 14.61 16.21 6.73 41.52
EPS -6.10 14.39 0.60 0.83 2.16 260.24
TOBIN 0.63 6.06 1.27 1.48 0.86 58.11
DSIZE 3 16 5 6.57 3.04 46.27
ID 0 0.43 0 0.06 0.13 216.67
MD 0 0.60 0.06 0.11 0.13 118.18
DHOLD 0.07 0.71 0.33 0.32 0.15 46.88
EHOLD 0 0.46 0.10 0.11 0.11 100.00
DEV 0 0.68 0.05 0.07 0.11 157.14
The variables have been SIZE 2.16 4.57 3.38 3.40 0.46 13.53
explained in Table 1

Table 3 Empirical results of research model is suitable for obtaining firm valuations. The variance
Variable Regression coefficient BETA value inflation factors of each independent variable estimated in
the research model ranged from 1.54 to 4.56 and were
INTERCEPT -65.77 (-6.03)*** – lower than 10. The collinearity problems among the inde-
BV 1.37(3.82)*** 0.19 pendent variables were nonsignificant (Greene 2008).
EPS 2.09 (2.10) ** 0.10 Table 3 shows a summary of the regression analysis.
TOBIN 30.64 (6.52)*** 0.46 According to the empirical results of the research model
TOBIN x DSIZE 0.73 (1.74) * 0.11 shown in Table 3, the model has a statistical significance of
TOBIN x ID 27.61 (3.96)*** 0.18 1 %. Intellectual capital valuation, Tobin’s Q (TOBIN), is
TOBIN x MD 32.79 (4.23)*** 0.17 positively related to firm value, and is statistically signifi-
TOBIN x DHOLD -14.77 (-1.91)* -0.11 cant at 1 %. Regarding the interaction of Tobin’s Q and
TOBIN x EHOLD 3.12 (0.32) 0.02 corporate governance variables, Tobin’s Q and director
TOBIN x DEV -25.89 (-2.31)** -0.08 board size (TOBIN 9 DSIZE), Tobin’s Q and percentage
SIZE 5.98 (1.50) 0.06 of independent directors (TOBIN 9 ID), and Tobin’s Q
R2
0.93 and percentage of managers as concurrent directors (TO-
Adjusted R2 0.92 BIN 9 MD) are positively related to firm value, and have a
F test of model 132.45*** statistical significance of 10, 1, and 1 %, respectively. The
empirical results show that a larger director board size
* Significant level at 10 %, ** Significant level at 5 %, *** Signifi-
cant level at 1 %. The figure is t value in the bracket results in a greater contribution to firm decision-making
P is the stock price per share, BV is the book value per share, EPS is through the collective thinking of board members. A higher
the earnings per share, TOBIN is the Tobin’s Q, TOBIN 9 DSIZE is percentage of independent directors and a higher profes-
the interaction of Tobin’s Q and director board size, TOBIN 9 ID is sional level of the director board results in greater super-
the interaction of Tobin’s Q and percentage of independent directors, visory ability for management behaviors. A higher
TOBIN 9 MD is the interaction of Tobin’s Q and percentage of
managers as concurrent directors, TOBIN 9 DHOLD is the interac- percentage of managers as concurrent directors eliminates
tion of Tobin’s Q and percentage of director holdings, TO- the information asymmetry among directors and managers,
BIN 9 EHOLD is the interaction of Tobin’s Q and percentage of aligning managers with the firm’s goals. This enhances the
external shareholder holdings, TOBIN 9 DEV is the interaction of positive effect of intellectual capital valuation on firm
Tobin’s Q and deviation degree between control right and cash-flow
right, and SIZE is the firm size value.
The interaction of Tobin’s Q and percentage of director
holdings (TOBIN 9 DHOLD), Tobin’s Q and deviation
degree between control right and cash-flow right (TO-
were non-significant that evaluated by the standardized BIN 9 DEV) are negatively related to firm value, and have
residual statistic and the Hampel identifier. This study is a statistical significance of 1, and 5 %, respectively. The
appropriate to apply the multi-regression model (Dickey empirical results show that a higher percentage of director
and Fuller 1981; Wilcox 2003; Greene 2008). The empir- holdings, and a greater deviation degree between control
ical results showed that the adjusted R2 of the research right and cash-flow rights (more deviation from control
model was approximately 0.92 and that the F test was right, cash-flow right, and ownership because of a com-
statistically significant (p \ 0.01); thus, the research model pany’s triangular structure or cross-holdings) results in

123
Value Relevance of Tobin’s Q and Corporate Governance
decreased positive effects of intellectual capital valuation
on firm value. The BETAs values of Tobin’s Q, and the
interaction of Tobin’s Q and corporate governance vari-
ables ranged from -0.11 to 0.46, and the most influential
variable on the firm value is Tobin’s Q (TOBIN). In
summary, the empirical analysis of this study supports all
the research hypotheses, except for Hypothesis 6. Corpo-
rate governance-related variables either increase or
decrease the positive effect of intellectual capital valuation
on firm value.
In the past decade, hotel operations have recognized the
importance of managing intellectual resources for gaining
and sustaining competitive advantage. A firm’s manage-
ment team should also consider increasing investments on
intellectual capital to achieve the characteristics of the
tourism industry, and operate corporate governance well.
This enables firms to gain and sustain competitive advan-
tages related to management strategies, thereby enhance
firm value.
Conclusion
This paper uses the Taiwanese tourism industry as the
research sample and presents a discussion on the relevance
of intellectual capital, firm valuation, and corporate gov-
ernance by multi-regression model. The potential contri-
butions of this paper include (a) Examination of the value
relevance on Tobin’s Q, (b) examination of the moderating
effect of corporate governance on Tobin’s Q, include six
variables of corporate governance, such as director board
size, percentage of independent directors, percentage of
managers as concurrent directors, percentage of director
holdings, percentage of external shareholder holdings, the
deviation degree between control right and cash-flow right,
and (c) using Taiwanese tourism industry as a non-US
sample framework. The results show that intellectual cap-
ital is positively related to firm valuation, and that corpo-
rate governance has an influence on the positive
relationship between intellectual capital and firm valuation.
Director board size, the percentage of independent direc-
tors, and the percentage of managers as concurrent direc-
tors increases the positive effects of intellectual capital
valuation on firm value. A higher percentage of director
holdings, and a greater deviation between control right and
cash-flow right decrease the positive effects of intellectual
capital valuation on firm value. The results of this paper not
only supplement the literature, but can also act as a refer-
ence for governmental agencies, academics, and practitio-
ners, especially for management strategies to achieve the
characteristics of the tourism industry, including hetero-
geneity, intangibility, participation, non-separation, per-
ishability, and flexible site-selection.
229
This paper offers important insights into the Taiwanese
tourism industry. The tourism industry should also consider
increasing the investments of intellectual capital and
operate corporate governance well to gain and sustain a
competitive advantage, thereby enhancing firm value. The
results can compensate for the lack of research on this topic
and provide a reference for promotion and development of
intellectual capital and corporate governance for the tour-
ism industry.
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