Impact of OFDI on Domestic R

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1、ImpactofOFDIonDomesticR&DActivity：EvidencefromTaiwan’sMultinationalEnterprisesinlow-wagecountriesCourseName:InternationalbusinessandtradeApplicant:汪鑫强StudentID:156001337Class:InternationalbusinessandtradeJune12,2016NingboUniversityContentsAbstract11.TheIntroductionofTaiwan22.LiteratureReview2

2、3.TheoreticalAnalysis34.Conclusion4References4AbstractThispapertheoreticallyandempiricallyinvestigatesthehome-countryeffectsofafirm’soutwardforeigndirectinvestment(OFDI)activity,specificallyOFDImotivatedbylowerlaborcostsinthehostcountry.Atwo-countryimperfectcompetitionmodelisdeveloped,andthei

3、nteractionbetweenafirm’sR&DspendinganditsOFDIisexamined.PaneldataonTaiwanesemanufacturingfirmsfrom1992–2005areappliedtotestthevalidityofthetheoreticalresults.Thepropensityscorematchingmethodisusedtoconstructacomparisongroupwithoutselectionbias.OurtheoreticalevidencerevealsthataTaiwanesefirm’s

4、OFDIispositivelyrelatedtoitsdomesticR&Dspending,particularlyinR&D-intensiveindustries.Keywords:R&D,outwardforeigndirectinvestment61.TheIntroductionofTaiwanTaiwan’sremarkableeconomicgrowthsincethe1950sisregardedasoneofEastAsia’seconomicmiracles.Itssuccesscanbeattributedtopoliciesdesignedtoprom

5、oteexportsandinwardforeigndirectinvestment(FDI).BecauseTaiwan’scapitaloutflowswerestrictlyregulateduntilthelate1980s,ithadbeenanetcapital-importingcountryforseveraldecades.However,followingtremendoustradesurplusesandrapidlyaccumulatedforeignexchangereservesbeginningintheearly1980s,Taiwanstart

6、edtoliberalizeitsexchangeratepolicyandoutwardforeigndirectinvestment(OFDI)policyinthemid-1980s.Sincethen,theconsiderableappreciationofTaiwan’scurrencyandincreasinglaborcostshaveencouragedmanyTaiwanesefirmsintraditionalindustriestomigratetolow-wagedevelopingcountries.Taiwanisnowoneofthelargest

7、OFDIinvestorsintheworld,particularlyinmainlandChina.2.LiteratureReviewBecausethedecisiontoengageinFDIistypicallyvoluntary,itisreasonabletoexpectthatOFDIbenefitsMNC.However,itisnotclearwhetherOFDIisalsobeneficialtothehomecountryoftheMNC.Earlie