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Blood, Thicker than Water: Interpersonal Relations and Taiwanese Investment in Southern China

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  • Y Hsing

    (Centre for Human Settlements, School of Community and Regional Planning, University of British Columbia, 2206 East Mall, Vancouver, BC V6T 1Z3, Canada)

Abstract

Transnational capitals have not been as footloose as theorists of a new international division of labor have proposed. Taiwanese direct investment in southern China represents a case where transnational capital flows are shaped by cultural and institutional conditions. The effectiveness of Taiwanese direct investment in southern China is achieved through the interpersonal networks established between Taiwanese investors and local Chinese officials. Such networks, in turn, are based on two major conditions. First, the newly gained economic autonomy of local governments in southern China, as well as the Chinese bureaucratic tradition of flexible interpretation and implementation of laws. Such an institutional context provided the space for the local state in China to bypass the scrutiny of the central state and to link up with the world economy directly through overseas Chinese capitals. Second, cultural and linguistic affinity between the Taiwanese investors and local Chinese officials have provided the tools for establishing interpersonal networks between Taiwanese investors and Chinese local officials through the principle of gift exchange.

Suggested Citation

  • Y Hsing, 1996. "Blood, Thicker than Water: Interpersonal Relations and Taiwanese Investment in Southern China," Environment and Planning A, , vol. 28(12), pages 2241-2261, December.
  • Handle: RePEc:sae:envira:v:28:y:1996:i:12:p:2241-2261
    DOI: 10.1068/a282241
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    Cited by:

    1. Michael Carney, 2005. "Globalization and the Renewal of Asian Business Networks," Asia Pacific Journal of Management, Springer, vol. 22(4), pages 337-354, December.
    2. Huck-ju Kwon, 2007. "Transforming the developmental welfare states in East Asia," Working Papers 40, United Nations, Department of Economics and Social Affairs.
    3. Chen, Liang-Chih, 2015. "Building extra-regional networks for regional innovation systems: Taiwan's machine tool industry in China," Technological Forecasting and Social Change, Elsevier, vol. 100(C), pages 107-117.
    4. Lei, Han-Sheng & Chen, Yung-Shuan, 2011. "The right tree for the right bird: Location choice decision of Taiwanese firms' FDI in China and Vietnam," International Business Review, Elsevier, vol. 20(3), pages 338-352, June.
    5. Daniel You‐Ren Yang & Neil M. Coe, 2009. "The Governance of Global Production Networks and Regional Development: A Case Study of Taiwanese PC Production Networks," Growth and Change, Wiley Blackwell, vol. 40(1), pages 30-53, March.
    6. Roger Strange & Igor Filatotchev & Yung-chih Lien & Jenifer Piesse, 2009. "Insider Control and the FDI Location Decision," Management International Review, Springer, vol. 49(4), pages 433-454, September.

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