Studies On Difference Of Location Choices Among Taiwanese' Agricultural Direct Investment Into Fujian's Cities

Taiwanese direct investment into mainland agriculture fields has been the important components of foreign direct investment (FDI) absorbed by mainland. FuJian is the province which attracts the most agricultural investment from Taiwanese. But its distribution is unbalance, 90% of it was obsorbed by Zhangzhou and Fuzhou. Recent years, it is demonstrating the tendency of extension from coastal cities into hill cities, similar to the tendency of Taiwanese investment into mainland. So, it is important to study the location choice behavior and its influence factors of Taiwan investors. it is very helpful for absorbing more agricultural FDI from Taiwan, and for promoting corporation between the two sides in agricultural field.Based on eclectic theory, transaction cost theory and social network——embeddedness theory, the author tried to construct a framework to analyses the Taiwanese's investment behaviors. The contents of this paper arranged as follow: In the first chapter, the author introduced the background, significance, methods used, and study steps of the study. In the second chapter, the author reviewed the studies on FDI location choice. Then in chapter three, the author set up a framework based on transaction theory and social network theory. In chapter four, the author descriptively analyses the statistics obtained through interview. In chapter five, the author analyses the location choice behavior of Taiwanese. In chapter six, the author compared the investment environment of seven cities in Fujian. At last chapter the author summarized the conclusions and proposed several advices.The statistics showed that: 1) the Taiwan investors who invested in Fujian agriculture still took the costs reduction as the most important motivation; then came after the motivation of chasing the market and to taking advantages of their social network, coordinating with the strategies of the parent company in Taiwan; 2) Taiwan investors who invested in different places and operated in different industries had different attentions on different investment environment factors; 3) all of them put more of their attentions on"soft"investment environment than what they put on"hard"investment environment; 4) Taiwan agricultural investors also pay attention to following factors: geographic location and climate, obtaining land easy or not, justice of law enforcement, the price of the land, the efficiency of local government, approaches to settle disputes, stability and transparency of local government's polices, the potential of local market, supply of water, power and primary production factors, and convenience of collection information.Using the method of binaural probit model, the author revealed the main factors which significantly influencee the Taiwan investors'location choice behavior in Fujian, based on the data collected by face to face interview. The results demonstrated that: 1) some of the factors notably influenced the location choice that of Taiwanese, which are the operation experiences, obtaining land easy or not, obtaining loans from banks, market potential, justice of law enforcement. Among them, obtaining land easy or not, obtaining loans from banks, market potential, and justice of law enforcement are negatively correlated with location choice. While the factors of operation experiences and market potential is positive. That is to say the Taiwanese who want to take advantages of their operation experiences, or pay attention to the local market is more likely to invest in coastal cities. While the one who wants to get land at lower price, or obtain loan from banks, or focus on the justice of law enforcement of legal operation department are more likely to invest in hilly cities. 2) The size of enterprises, friends and relatives, dispute settle approaches, competition environment, and infrastructure situations are not significant. The study confirmed that Taiwan investors are paying more and more attentions on local market。Then the author evaluated the agricultural investment environment of Fujian province according to the scores given by Taiwan investors. All of Taiwan investors had this opinion that Fujian's agricultural investment environment need to be perfected, especially the aspects of obtaining bank loans, industrial chains and irrigation infrastructure. The study also compared the investment environment of 7 cities in Fujian province. The results demonstrated that the best agricultural investment environment is owned by Xiamen city, which has the best water resource facilities and infrastructure, the most sufficient supply of skilled worker, the most perfect industry chain, the easiest of getting bank loans, the lightest burden of fees and taxes, and the most sufficient supply of information. And the city ranked after Xiamen was Zhangzhou, then came after Longyan, Putian, Shanming, Quanzhou, Fuzhou.At last, according to the results demonstrated by the study, the author proposed some advice for perfecting the agricultural investment environment of Fujian province in order to attract more Taiwanese to invest in Fujian province, for example: to perfect finance environment, to improve the governance abilities of government, etc.