英文摘要 |
With the increasing global competition nowadays, firms in Taiwan have been actively engaged in foreign investments to enhance their competitiveness. China is the biggest recipient of Taiwan's outward foreign direct investment (FDI) for years, at least recent years. Given that Taiwan's parent firms continuously invest in R&D activities with a higher level, we are motivated to examine whether such R&D investments of parent firms can contribute to their China subsidiaries, i.e., R&D spillover effects. In addition, we further examine whether different parent firms' strategies lead to differential R&D spillover effects. Using a sample of Taiwan's listed and OTC firms for the 1999-2007 period, we find that there exists a significant positive relation between R&D assets of Taiwan's parent firms and the financial performance of their subsidiaries in Mainland China. This implies that the R&D spillover effect of Taiwan parent firms can be important drivers of their China subsidiaries' performance. Furthermore, the next investigation reveals that this R&D spillover effect is stronger for Taiwan parent firms adopting differentiation strategy compared to those adopting cost leading strategy. These results suggest Taiwan firms to pursue success in foreign investments through engaging in an intra-firm international transfer of R&D knowledge, based on the differentiation strategy, from parent firms in the home countries. |