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Prospects for Taiwan’s Outward Investment in China

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  • Chen, Chien-Hsun

Abstract

The similarities in language and culture have given Taiwanese companies an edge in employing ethnic ties through personal connections or “guanxi” to overcome competitive and resource disadvantages. Such relational linkages facilitate Taiwanese investment in China. Since Taiwan has orchestrated a very efficient production network to serve its customers, cross-strait investment and trading activities have driven the formation of close collaborative relationships between Taiwanese and Chinese industries. China is now developing its domestic market to promote economic growth. This is bound to affect cross-strait industrial division of labor, which is not only accelerating the localization of Taiwan businessmen in the Mainland, but also further weakening the connections between Taiwanese businessmen and their parent companies in Taiwan. In the financial sector, Taiwanese banks would do well to find their own niche markets and formulate appropriate strategies, instead of following the practices of large international banks.

Suggested Citation

  • Chen, Chien-Hsun, 2023. "Prospects for Taiwan’s Outward Investment in China," MPRA Paper 116578, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:116578
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    File URL: https://mpra.ub.uni-muenchen.de/116578/1/MPRA_paper_116578.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Taiwan’s outward investment in China; global supply chain; business strategies; globalization;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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