Impacts of Regional Network Dynamics on Taiwan’s Foreign Trade and OFDI

The purpose of this study is to explore the impact of regional network(regional economies integration)dynamics(integration of free trade agreements[FTAs]/regional trade agreements[RTAs]in Asia-Pacific economies)on Taiwan’s trade(export)and outward foreign direct investment(OFDI)flows.This study uses two models to estimate export and FDI respectively to investigate the impact of regional network dynamics on individuals,and the impact of trade effects on FDI.Research period is 2001-2016.Estimated findings indicate that Taiwan’s exports are highly dependent on major Asian countries,and the GDP growth of major trading countries has no significant effect on Taiwan’s exports,but the GDP growth of major Asian countries has positive and significant effects on Taiwan’s FDIs.Exports have no significant effects mostly on FDI,which implies that Taiwan’s main OFDIs have no significant correlation with export orientation.In terms of regional network integration,the impact of the initial regional network integration(ASEAN plus three countries)has no significant effects mostly on the export flows of Taiwan’s trading countries,but has relatively significant effects on the FDI flows of Taiwan’s FDI countries;the impact of the relatively mature regional network integration(ASEAN plus six countries)has negative effects on the export and FDI flows of Taiwan’s major trading and FDI countries,especially Association of Southeast Asian Nations(ASEAN)and Japan.The impact of the bilateral economic agreement(Economic Cooperation Framework Agreement[ECFA])has positive and significant effects on the export flows of Taiwan’s major trading countries,especially in Asian countries;while for FDI countries has only a positive and significant effect on China,but has a negative and significant effect on ASEAN.According to the analysis results,regional network integration appears to have significant negative effects on Taiwan’s major trading and FDI partners.

Exploring the Influencing Factors of FDI in China’s Internal Regions:Evidence From Taiwan

This study aims to explore the influencing factors of the location determinants of Taiwan’s foreign direct investments(FDIs)in China’s internal regions.This study proposes three models to examine the influencing factors of Taiwan’s FDIs in China by combining the location advantages of the host country,the economy and politics of the home country,and network relationship in bilateral and regional trade agreements:First,analyze the location distribution of Taiwan’s FDIs in China’s six regions;Second,analyze the location determinants of Taiwan’s main sectors’(manufacturing and service)FDIs in China;Third,analyze the location determinants of Taiwan’s high-tech industries’FDIs in China’s six regions.The estimated results show that bilateral trade agreement seems to have positive effects on Taiwan’s FDIs in China,while regional trade agreement seems to have negative effects.In Taiwan’s political form,the ruling party with characteristics of political defense against China seems to have negative effects on most of Taiwan’s industries(except manufacturing)and the overall FDIs in China.In terms of China’s relevant economic factors,the main determinants of Taiwan’s high-tech industries’FDIs in the major regions of Eastern and South Central of China are infrastructure and high-level human capital resources.China’s GDP growth and increase in unit labor cost have negative effects on FDIs in most regions of China.This implies that the advantage of low wages in China Factory may gradually decline.This study provides some references and implications for future research and policy makers for the analysis of relevant influencing factors of FDI.