Taiwan: Inward Foreign Direct Investment and Its Policy Context

In K.P. Sauvant, P. Mallampally, and G. McAllister (Eds.). Inward and outward FDI country profiles (2nd ed., pp. 1066-1081) New York, NY: Columbia University. 2013

17 Pages Posted: 26 Mar 2012 Last revised: 28 Apr 2015

See all articles by Victor Zitian Chen

Victor Zitian Chen

University of North Carolina, Charlotte; University of North Carolina (UNC) at Charlotte - The Belk College of Business Administration

Ming Sung Kao

Independent

Anthony Kuo

College of Management, Fu Jen Catholic University

Date Written: March 26, 2012

Abstract

Taiwan has long maintained an explicit policy of attracting inward foreign direct investment (IFDI) as part of its growth strategy, although inflows have been subject to various restrictions. The primary objective of Taiwan’s stance toward FDI was initially to attract export-oriented investment based upon the competitiveness of its highly educated and productive labor force. More recently, this objective has been modified to focus on attracting FDI into increasingly technology-intensive areas and to encourage or promote domestic technological spillovers. In recent years, although Taiwan’s IFDI stock has more than tripled, from US $20 billion in 2000 to US $64 billion in 2010, it remains a relatively small recipient compared with its neighboring economies in the Asia-Pacific region. Annual IFDI flows to Taiwan have been in single-digit US $ billion during 2000-2010, with a peak of US $7 billion in 2007 followed by a steady decline during 2008-2010. In 2010, Taiwan received inward FDI of US $2 billion only. It is, however, generally seen that the release of prohibition against mainland China investors on June 30, 2009, and the newly signed landmark cross-strait Economic Cooperation Framework Agreement (ECFA) on June 30, 2010 will reinforce Taiwan’s robust investment climate and stimulate IFDI.

Keywords: Taiwan, FDI, Policy

JEL Classification: F21, F23, O1, R58

Suggested Citation

Chen, Victor Zitian and Kao, Ming Sung and Kuo, Anthony, Taiwan: Inward Foreign Direct Investment and Its Policy Context (March 26, 2012). In K.P. Sauvant, P. Mallampally, and G. McAllister (Eds.). Inward and outward FDI country profiles (2nd ed., pp. 1066-1081) New York, NY: Columbia University. 2013, Available at SSRN: https://ssrn.com/abstract=2029168

Victor Zitian Chen (Contact Author)

University of North Carolina, Charlotte ( email )

The Belk College of Business
Charlotte, NC 28223

HOME PAGE: http://www.ChenZitian.com/

University of North Carolina (UNC) at Charlotte - The Belk College of Business Administration ( email )

The Belk College of Business
Charlotte, NC 28223

HOME PAGE: http://www.ChenZitian.com/

Ming Sung Kao

Independent ( email )

Anthony Kuo

College of Management, Fu Jen Catholic University ( email )

No. 510 Zhongzheng Rd.,
Xinzhuang
New Taipei City, 24205
Taiwan

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
253
Abstract Views
1,528
rank
133,969
PlumX Metrics