Variables Model 1 Model 2 Model 3 Model 4 Model 5 Past
Investment Past3 1.143E-1***
(6.030)
Variable. Size 3.832E-3***
(3.910) Log likelihood -331.964 -310.349 -311.473 -316.273 -307.105 Number of Firm 1,905 1,905 1,905 1,905 1,905
The number in the parentheses is the t value.
* is the significance at 10% level ** is the significance at 5% level *** is the significance at 1% level
5. Conclusions
With the coming of globalization, firm’s FDI plays an important role in Taiwan. The past FDI researches focused on macro data. However the macro data can not reflect each firm’s heterogeneous. In this study, we use network linkages, industrial clusters and mimetic isomorphism to investigate Taiwanese firms FDI behavior. In data source, this study used the dataset of FDI survey conducted by Department of Statistics, Ministry of Economic Affairs, Taiwan over the period of 1997-2000. That consisted of 1905 Taiwanese manufacturing firms engaging in FDI under government approval.
But to investigate into individual firm’s characteristics, we use the Factory’s Correction and Operation Investigation over the period of 1997-2000 is conducted by the Industry Development Bureau, Ministry of Economic Affairs, Taiwan to catch the points of RDSL, KL, averaged firm size and wage.
The empirical results showed that the accumulated investment in previous years did affect the likelihood of firm’s FDI in same industry. This finding is consistent with the former researches (Ito and Elizabeth, 2002; Johanson and Vahlne, 1977 and Lin and Yeh, 2004). The result indicates the importance of experience and knowledge in foreign operations.
As for the linkages effects, Chen and Chen (1998) argued that linkages effects should be positively related to FDI, but they did not consider the time factor. They also focused only on the relationship between linkages effects and FDI, while they did not provide a concrete data to describe this situation. In this study, in order to have a deeper understanding about the influence of linkages effects on the likelihood for Taiwanese manufacturing firm’s FDI, we used a proxy variable to measure this relationship between firms in differential industry. From our empirical results, we can find that the linkages effects occur only in specific areas but not all. Especially, the linkages effects are positively and significantly related to Taiwanese manufacturing
firms engage in FDI in China.
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