| Coping with the raise of land and labor costs in Taiwan, Taiwanese firms gradually move part of their value-added activities that are sensible to labor costs to Mainland China, by doing which their competitiveness may maintain. It is the normal model of investment operation between China and Taiwan with "Taiwan-China-the third party". It means when you get order form foreign, then you put the order to the third party which to divide between china to product. Lower price for labor and abundant natural resources can be use for reduce the cost of company. The primary purpose of this thesis is to empirically evaluate the impact of the model of investment operation on a firm's operation performance. The study conducted a penal data to collect 5 years (1998-2002) financial information from the 109 listed Electronics Hardware producers companies in Taiwan and combining experience research with normal studies which with the by SPSS statistic analysis.Empirical results show that, given appropriate model specifications, ratio of China production ,degree of sales management, percent of china investment is negatively associated with a firm's operation performance while turnover rate of good in stock, exchange equipment, investment in china of the firm and the size of firm is positively associated the firm's operation performance. Research and design is show the quadratic curve estimate for inverse U. Following the china to enter to WTO, there are more and more chance for us to focus on the china market, vale-added ratio consistently exerts a positive impact on the operation performance. Our empirical results in general support our early arguments that while comparative advantage could bring short-term benefits, it is competitive advantage that could become long-term competitiveness to the firm. Strategic implications and suggestions to industrial policy regarding regulation of China investment have been discussed. |
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