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The importance of LCD industry has been not less than that of foundry and DRAM industries in the stock market. Due to the keen competition among Japan, Korea and Taiwan, all manufacturers have been built up more factories to enlarge the output and lower the cost, that has resulted in a down-trend for the panel price in the long term . Even there was some price going up occasionally, it is only short-term phenomena. Such price down-trend in the long term is very similar to that of DRAM and electronic product. The stock price of the relevant listed companies of LCD industry has been going up and down,the type of price fluctuation is quite similar to that of the cyclic stocks. This thesis is trying to find out the relationship between the LCD industrial index and panel-price, which makes use of the weighted index of the eight listed LCD panel companies’ stock prices in Japan, Korea and Taiwan(called as MCI), linked with the panel-price fluctuation in the past two years, by means of Time Series Analysis.
The empirical results reveal as follows:
1. There is a long-term equilibrium relationship between the MCI(either industrial average index or industrial closed index) and LCD panel-price.
2. The fluctuation of average MCI is significantly leading the variation of panel-price, which means the average MCI has LCD panel-price prediction power. However,the leading position of the closed MCI to panel-price''s fluctuation is insignificant.
3. The impulse response of either average MCI or closed MCI to LCD panel-price is positive.But the impulse response of the former is greater than that of the latter.
4. The longer the period extends, the better decompostion degree of LCD industrial index to fluctuation of panel-price. But, the decompostion degree of average MCI to fluctuatin of panel-price is better than that of closed MCI.
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