Journal of Economics and Management Volume 14, No. 2 August, 2018

The Impact of Operational Digitalization and Intangible Asset Investment on Technical Efficiency and Financial Performance of Taiwan’s Social Work Industry

Ching-Yu Chen

Department of International Business, Tunghai University, Taiwan.

Jwu-Rong Lin

Department of International Business, Tunghai University, Taiwan.

Chun-Ju Liu

Department of Accounting, Tunghai University, Taiwan.

Abstract

This study establishes a stochastic frontier model and regression equations to assess the impact of operational digitalization and intangible asset investment on technical efficiency and financial performance. Taiwan’s census data on the social work industry is utilized to conduct empirical studies. The study’s contributions include sustained evidence that (1) operational digitalization and intangible asset investment are positively correlated with technical efficiency and financial performance and, (2) that they influence financial performance through a mediating effect rather than a direct effect. Furthermore, we show that the phenomenon of the information technology productivity paradox does not exist in this industry. Lastly, the study reveals that public social work services, even with greater resources, show poorer financial performance than private organizations.

Keywords：Social Work Industry, Operational Digitalization, Intangible Asset, Operating Performance, Stochastic Frontier Production Function.

JEL Classifications：C51, I12, M41.

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