A Study on the Determinants of Direct Foreign Investment: The Case of Taiwan Manufacturers

• Main Authors: Lin, Kun-Yung, 林坤永
• Other Authors: Ming-Wen Hu
• Format: Others
• Language: zh-TW
• Published: 1996
• Online Access: http://ndltd.ncl.edu.tw/handle/27107351719943281531

碩士 === 淡江大學 === 產業經濟學系 === 84 === Recently, with the changes in the economical environment and thepromotion of governmental policy, and under the attraction of developingcountries'' profitable manufacturing conditions, Taiwan manufacturers shifttheir investments abroad. Based on the theory of direct foreign investment(DFI), this thesis focuses on the pooling data of some fifteen industriesbetween 1987 and 1994. Through empirical study, this paper studies thefactors that affect DFI of Taiwan''s manufacturers in China, Hong Kong, US., Indonesia, Singapore, Malaysia, Philippine, and Thailand. As the empirical studies show, R & D activities, vertical integration,industry concentration ratio affect DFI in positive ways. The traditionallabor-intensive industries that are influenced by economic transition moveoverseas as the supply of labor decreases and the wage rate rises.Non- economic factors such as the incentive policies and trade barriersraised by host countries and Taiwan''s domestic political and socialstability bring decisive influences on DFI. Among those areas in question, only the DFI to China is established onvertically specialized production cooperation. The subject of trade barriersis relevant only in DFI to U.S. The political conflict and the rise in crimerate urge Taiwan''s investors to shift their DFI to China, Hong Honk, andSoutheast Asia. Industries with R & D advantage tends to invest in China,Hong Honk, U.S., Singapore, and Thailand. In a word, though the determinants of DFI vary from region to region,the findings of this paper proves valid under relating theories. This studyadvances a profile of DFI of Taiwan''s manufacturers. With both economic andnon-economic factors taken into consideration, this research display thatpolitical and social stability is the most significant determinant ofTaiwan''s DFI. In the last few years, as Taiwan experienced radical economictransit, it becomes a trend to invest overseas. To avoid "IndustrialHallowing-out," government should provide a stable and profitable investmentenvironment, as well as the industrial upgrading and technological innovation.