Determining the factors affecting foreign capital inflow: A survey of Taiwanese firms in the Subic Bay Freeport Zone

• Main Author: Pieh, Liang-Wei (Willie) L.
• Format: text
• Language: English
• Published: Animo Repository 2002
• Subjects: Capital movements; Investments; Foreign; Subic Bay (Philippines); Export processing zones; International Economics
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/2965
• Institution: De La Salle University

This study conducts a broad investigation of the determinants of foreign direct investments (FDI) of the Taiwanese firms in Subic Bay Freeport most especially with respect to their investments in China and the ASEAN-4 (Malaysia, Vietnam, Thailand and Philippines). The primary data of this research were entirely based on the results and the responses on the survey method conducted in the Subic Bay Freeport Zone. A total of 30 Taiwanese firms are surveyed. The research also used secondary data or references as supplementary materials such as the Asian Development Review (1993), Global Development Finance (1999), and other related articles. To attain as objective a testing of the Major Foreign Investment Criteria (theorized by the US Brazil Business Council) as well as other theories of investments as possible, the study examined the performance of the theory in a nonparametric (Spearman's Method) and descriptive statistics that tests the concept developed.After a thorough analysis of the survey data, there are common policy concerns the Taiwanese corporations in all the countries (China and ASEAN-4) considered most important or decisive. In terms of investment factors, these are (in descending order) good investment climate, economic and political stability, adequate infrastructure, quality of local labors and financial incentives. Market access is only of average importance. Those that the investors do not give much regard are: non-financial incentives, nearness to Taiwan, availability of anchor firm, and nearness to market. As an exception, investors do enjoy permanent resident status, which is one of the non-financial incentives. In terms of onsite or offsite facilities, those that the investors in all countries considered important are (in descending order): reliable electricity, water supply, consulting, computing or accounting, sanitation and waste disposal system, telephone/telex services, and standard business services. In terms of other factors, peace and order, development of telecom industry and internet access are most decisive for all countries, followed by presence of related industries and local tradition.To sum up, after conducting a thorough analysis of determining the factors affecting capital inflow-a survey of Taiwanese firms in the Subic Bay Freeport Zone as well as their branch operations in China and ASEAN, there are some final steps in order to make these firms more regionally competitive: privatization, liberalization, diversification as well as globalization. Political stability, infrastructure, incentives, peace and order, labor quality and issues are among some of the important factors that investors from Taiwan deem important. For the meantime, however, with the Subic Freeport Zone as a springboard, future prospects for a greater growth in FDI in these nations certainly will prosper.