Magnitude and volatility of Taiwan's net foreign assets against Mainland China: 1981–2009
AbstractThe ongoing private capital inflows from Taiwan to China is a steady concern for Taiwan's policymakers. According to the official data, Taiwan's private enterprises have cumulatively invested about US$ 150–280billion in China since 1987. However, the figures are widely perceived to be an underestimation and there exists a huge gap even between the estimations conducted by different government departments. The purpose of this paper is to re-estimate Taiwan's net foreign assets (NFA) against China, revising the so-called “dark matter” hypothesis proposed by Hausman and Sturzenegger (2006, 2007). In contrast to the current statistics being limited to registered direct investment or census investigation, the advantage of our model is that direct investment, portfolio investment, and the possible knowledge and property spillovers are included. We show that changes in Taiwan's NFA against China over GDP are negative in economic and political turmoil, such as the missile crisis in 1995, Asian financial crises in 1997–98, and global tsunami in 2007–09. From 2000, the growth rates we simulate are never lower than the official data till 2009. We also suggest some possible economic causes that lead to the huge Taiwan's NFA against China.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal China Economic Review.
Volume (Year): 23 (2012)
Issue (Month): 3 ()
Contact details of provider:
Web page: http://www.elsevier.com/locate/chieco
Taiwan's NFA against China; Revised dark matter hypothesis;
Find related papers by JEL classification:
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statistics
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wendy Shamier).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.