Relationship between FDI Characteristics toward China and Political Risk Management Methods in Foreign Direct Investment

The objective of this paper is to study the relationship between internal characteristics toward investing on China and political risk management methods in foreign direct investment (FDI). Chief executive officers of all 301 Taiwanese publicly listed information technology (IT) firms were surveyed about the political risk management issues of investing in China and the methods and reasons that these firms use certain methods to manage political risk in China. The result shows that except the relationship between judgment of political risk and usage of passive methods, all other four findings show significant differences. These are therelationship between confidence of profit/risk assessment and usage of moderate methods, the relationship between international investment experience and usage of moderate methods, the relationship between whether considering China as amajor market and usage of moderate methods, the relationship between judgment of potential loss due to political risk and usage of passive methods.