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International Involvement, Target Market Selection, and Consolidated Performance: A Firm-Level Analysis of Taiwan's FDI in China

Author

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  • Huey-Ling Shiau
  • Chen-Jui Huang
  • Fong-Chyi Chen

Abstract

This paper assesses the sensitivity of consolidated corporate performance to two aspects of foreign direct investment (FDI): international involvement and target market selection. Empirical evidence from China-bound FDI by Taiwan's listed companies between 2000 and 2010 is summarized as follows. First, under the internalization of FDI, performance tends to rise with intensity of FDI activity. Second, profitability appears higher as FDI targets the export market outside China. Third, synergetic performance is created mainly through improved efficiency in resource management rather than increased sales, which indicates effective cost control is crucial for successful FDI in emerging markets such as China.

Suggested Citation

  • Huey-Ling Shiau & Chen-Jui Huang & Fong-Chyi Chen, 2013. "International Involvement, Target Market Selection, and Consolidated Performance: A Firm-Level Analysis of Taiwan's FDI in China," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 49(S4), pages 184-196, September.
  • Handle: RePEc:mes:emfitr:v:49:y:2013:i:s4:p:184-196
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    Cited by:

    1. Miaojie Yu, 2020. "China-US Trade War and Trade Talk," Springer Books, Springer, number 978-981-15-3785-1, January.
    2. Sihong Wu & Di Fan & Liang Chen, 2022. "Revisiting the Internationalization-Performance Relationship: A Twenty-Year Meta-Analysis of Emerging Market Multinationals," Management International Review, Springer, vol. 62(2), pages 203-243, April.

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