International Journal of Multidisciplinary Research and Development

International Journal of Multidisciplinary Research and Development


International Journal of Multidisciplinary Research and Development
International Journal of Multidisciplinary Research and Development
Vol. 7, Issue 1 (2020)

Research on territorial structures of Taiwanese TNCs’ subsidiaries in electronic industry


Denis Otryvanov

The objective of this paper is to investigate the factors influencing on territorial structures of Taiwanese transnational corporations (TNCs). The study used combined data of the largest Taiwanese TNCs from their annual reports alongside with Taiwan Statistical Databook. More than 800 subsidiaries were investigated and sorted by 4 major types: manufacturing, R&D, marketing and investing. Combining logarithmic gravity model with CAGE (cultural, administrative, geographic and economic) distance framework an empirical analysis was conducted. To reveal the territorial structure of Taiwanese subsidiaries the number of subsidiaries in the host country was chosen as a dependent variable. GDP of the host country and Taiwan alongside with the distance between them represented a gravity equation in the model. Macroregion dummy variables, language preference, difference in political stability were chosen as a representation of CAGE distance. GDP per capita and GDP annual growth rate were used as control variables. 7 cases for 4 types of subsidiaries and for 2 manufacturing types of TNCs in electronic industry and for total number of subsidiaries were analyzed. The research has shown the importance on dividing subsidiaries into their specialization types and defining macroregions where TNCs’ subsidiaries operate. These typologies help to understand the nature of territorial structure of TNCs’ abroad activity and reveal the differences among types of subsidiaries and manufacturing types of TNCs. However, I haven’t found high significance for distance impact for Taiwanese TNCs. Cultural similarity impacts not only FDI inflows, but also to the number of subsidiaries in the host country.
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How to cite this article:
Denis Otryvanov. Research on territorial structures of Taiwanese TNCs’ subsidiaries in electronic industry. International Journal of Multidisciplinary Research and Development, Volume 7, Issue 1, 2020, Pages 76-82
International Journal of Multidisciplinary Research and Development International Journal of Multidisciplinary Research and Development