Using a combined PLS path and MCDM approach in determining the effectiveness of Taiwan's outward FDI policy

Yi Hui Chiang*, Chih-Young Hung

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

4 Scopus citations

Abstract

Various studies have looked at outward foreign direct investment (FDI) from the host country perspective but have paid little attention to parent country determinants. Does the outward FDI policy (investment upper limit regulation) matter? In this paper, we propose a combined partial least squares (PLS) path model and multiple criteria decision-making (MCDM) approach to study Taiwan's outward FDI to China. The main purpose of this study is to investigate the determinants of Taiwanese firms' decisions in making FDI into China. Using data from Taiwanese optoelectronics firms doing business in Taiwan between 1998 and 2007), the results of the proposed model show that the outward FDI policy of the parent country is a key factor in Taiwan's outward FDI into China. It is also found that the macroeconomic environment of the host country was a stronger determinant than the parent country on Taiwan's outward FDI into China.

Original languageEnglish
Pages (from-to)1576-1586
Number of pages11
JournalWSEAS Transactions on Information Science and Applications
Volume6
Issue number9
StatePublished - 8 Oct 2009

Keywords

  • Foreign direct investment (FDI)
  • Multiple criteria decision-making (MCDM)
  • Parent country
  • Partial least squares (PLS)
  • Upper limit regulation

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