Over the past three decades the Republic of China (ROC) on Taiwan's degree of economic development has attracted worldwide attention. Its economy is growing at a pace that will qualify the ROC as a developed country by the turn of the century; in Asia it will be second only to Japan in per capita income. How has the economy been able to expand so rapidly? What governmental policies enable its annual growth rate to be at the forefront of the newly industrializing countries? These important questions guide Schive's study of the economic modernization of Taiwan.
To date no study of the rapid growth of Taiwan's economy has adequately analyzed the far-reaching contributions made by direct foreign investment. A wealth of comprehensive and reliable survey data on the activities of foreign firms in Taiwan, however, makes it possible to assess foreign investment in Taiwan's development, especially with regard to employment and exports.
The author's analysis shows that technological change has greatly aided the island nation's extraordinary economic growth. Schive's study yields abundant evidence of the links between direct foreign investment and technology transfer and deepens our understanding of these complicated and important economic issues.
In recent decades many corporations native to Taiwan have become multinational. Schive investigates both the causes and the effects of this change and reflects on the prospects of this trend in the Taiwanese economy. IN conclusion the author considers several important policy questions that concern direct foreign investment and the impact these policies will have on Taiwan's economic growth and prosperity as the island state faces the challenge of the twenty-first century.
Chi Schive is a Professor of Economics in the Department and Graduate Institute of Economics, College of Law, at National Taiwan University, Taiwan, Republic of China. He was formerly Professor and Dean in the College of Management, National Central University, Taipei, Taiwan; a Fellow of the Mont Pelerin Society, 1982; and a Visiting Scholar at the Hoover Institution, 1986.
The Foreign Factor
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