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FDI, exports and export spillover in Taiwan’s electronics industry

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  • Naiwei Chen
  • Ho-Chyuan Chen
  • Rong-Siou Lin

Abstract

This study primarily examines whether and how a firm’s exports are influenced by its own and other firms’ foreign direct investment (FDI) in an industry characterized by high proportions of exporters and FDI. A review of 619 firms in Taiwan’s electronics industry from 2006 to 2011 indicates the presence of optimal FDI in terms of exports. In addition, results suggest a negative (positive) export spillover from FDI for firms with low (high) FDI, signifying that FDI’s congestion/crowding-out effect is greater (less) than the demonstration/imitation effect for such firms. Moreover, a firm’s exports generally decrease with other firms’ exports particularly when its FDI is low, thus suggesting the predominance of competition’s negative effect over its positive effect under such circumstances. Furthermore, export spillover from FDI occurs through the competition effect and technology information effect, where the former (latter) drives a negative (positive) export spillover.

Suggested Citation

  • Naiwei Chen & Ho-Chyuan Chen & Rong-Siou Lin, 2022. "FDI, exports and export spillover in Taiwan’s electronics industry," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 27(1), pages 26-63, January.
    • Handle: RePEc:taf:rjapxx:v:27:y:2022:i:1:p:26-63
    DOI: 10.1080/13547860.2020.1827941
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    Cited by:

    1. Yu Cheng Lin & Sang Do Park, 2023. "Effects of FDI, External Trade, and Human Capital of the ICT Industry on Sustainable Development in Taiwan," Sustainability, MDPI, vol. 15(14), pages 1-24, July.

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