On The Factors Influencing The Location Choice Of Taiwanese Firms In Mainland China

By the end of2012, the mainland has totally approved88001Taiwan-fundedprojects.57.05billion dollars TDI is put into actual use. TDI occupies4.5%of FDIin China. Based on the current existed research, the article studies the regionaldistribution and industrial structure of TDI. The result says that the Yangtze RiverDelta, the Pearl River Delta and Fujian Province are still the main regions for TDI.However, the proportion of investment shows a downward trend. At the meantime,their degree of attention to the western inland areas has distinctly increased,especially the investment to Sichuan and Chongqing. In the industrial Structure,after the implement of Financial Cooperation Agreement and ECFA between Taiwanand Mainland, the investment to Service industry like finance and insurance tends astrong improve momentum. Finance and insurance and the real estate have ascendedto the Top Ten from TDI since2010. The main investment regions are the YangtzeRiver Delta, the Pearl River Delta, Sichuan, Beijing and Fujian.We have interviewed some Taiwanese businessmen in Fujian. Combined with therelated study report from Taiwan MOEA Investment Commission, we find that theincrease of labor cost, difficulty in developing inland market, financing problem arethe main barriers for Them. And the influence from barriers varies in differentprovinces. With the help of Provincial Panel Data, the research has done someempirical analysis of the influencing factors to the regional selection for TDI. Theresult indicates that the selection is positively related to the GDP, workers’ educationlevel and foreign trade dependence. On the other hand, to economic distance andFDI stock, it shows a negative correlation.As to give some reference of attracting TDI, according to the research result, thearticle proposes a few suggestions such as improving the soft environment forinvestment, optimizing the cross-strait cooperation and speeding up the cultivationof talents. Then, the research takes Fujian Province as the example, and does somecase analysis of investing in Fujian from Taiwanese firms. The research raises someproposals, such as strengthening the level of law enforcement, fixing the financialjoint between Fujian and Taiwan, constructing Xiamen financial cooperation districtand so on.