The Influence of China Investing Strategies on Corporate Performance for Semiconductor-Related Companies in Taiwan Stock Exchange Market

• Main Authors: Cheng-Yi Huang, 黃正誼
• Other Authors: Jonathan C. Ho
• Format: Others
• Language: zh-TW
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/35216821281902554922

碩士 === 元智大學 === 管理研究所 === 97 === Taiwan is a typical island economy with small dimensionality, poor natural resources and limited domestic market size. By following the influence of economic globalization and the rise of the newly economy, China, Taiwan enterprises also set up their plants there by enjoying the fruitful resources and cheap labor cost, the advantage of diminishing in culture difference and the reward of subsidiaries that provided by China government, etc. to reduce manufacturing cost or expand sales market and maintain the sustainable management and development. Hence the influence of Taiwan enterprises’ China investing strategies against the corporate performance is very key focus to be highly publicized. There is no fixed conclusion for the connection between internationalization and corporate performance in the past studies, which is either linear-positive, linear-negative, irrelevant or nonlinear relationship. This study is referred to the 3-Step theory of International Expansion by Contractoretal (2003) and based on the study sample of listed and OTC semiconductor-related companies in Taiwan Stock Exchange Market to verify if there is any s-shape curvilinear relationship between the degree of its China investing (width and depth) and corporate performance. The empirical evidence proved that s-shape curvilinear relationship is existed between the degree of China investing (width and depth) and corporate performance among most of Taiwan listed and OTC semiconductor-related companies, which is the same as what preceding scholar had studied. The inferred reasons could be the difference of law-system between two nations at initial investing stage, the infrastructure, the people’s civilization and the gap between the city and country, which increase the risk level those Taiwan enterprises that carried. The foreign-investing policy of China government was assigned in more directive manner that cost more time and spirit for Taiwan companies to understand. Except the enterprise management, the company should understand the local culture, market information in earlier stage. At stage 2, the previous investment of learning cost will be paid back. After the enterprise overcame the market barrier by deeply cultivating the local market, the firm will be more understood the local law, regulation and market mechanism. Additionally, the company is getting more familiar with customer habit, market distribution, promotion and advertising activities with better communication with company staff, also keep good relationship with local officials. Then, these learning experience and management efficiency, international sales power and management of supply-chain could contribute with strategic assets of the enterprise to improve the core competitiveness of its own. After getting into stage 3, the China government gradually adjusts his foreign-investing policy by canceling each aspect of favorable treatment, which will surely compress the profit level with more and more electricity shortage, water-shortage, labor-shortage, increase of banking rate, increasing of labor cost, etc. in recent years. The investing environment of China had been changed drastically that affected the management of enterprise. Due to above, Taiwan’s listed and OTC semiconductor-related companies’ performance of China market had been resulted in negative, positive and negative conditions in three different stages. In summary, the adjustment of management direction should be reflected suitably against China’s economic situation by Taiwan listed and OTC semiconductor-related companies. To cautiously evaluate the self-advantage with regional advantages of China market (industrial cluster, talent-intensive, labor-intensive, etc.) is the real key strategy by integrating both internal and external advantages to drive the enterprise to be updated with better developing foreground。