Building an International Investment Banking Industry in Taiwan: A Feasibility Study

Investment bankers are important financial market participants in developed economies. They serve the purpose of linking capital providers with capital users, aiming at seeking optimum financial risk and returns for both investors and issuers of securities. The major business of investment banking include high-yielding investing and risk management, security underwriting, mergers and acquisitions, and venture-capital financing, among others. Following the globalization of financial markets, the established investment banking firms extend businesses to all over the world, including Taiwan. These firms help domestic business with overseas merger and acquisitions, as well as convertible bonds and Glooal Depository Receipts (GDR) issuances. The services are needed because overseas financing and investing activities are imperative for Taiwanese business to grow d to maintain global competitiveness. It is more so if Taiwan plans to establish itself as a regional financial center. In this study, we attempt to analyze the feasibility of building an international investment banking industry in Taiwan. With reference to the literature on competitive advantage, we show where the competitive strengths of start-up investment banks may lie, and provide guidelines for successfully developing investment banking in Taiwan.