This study explores the determinants of Taiwan’s outward direct investment, particularly to Mainland China. The data comes from 2000-2010 Taiwan Economic Journal Dataset.
We employ Probit model and Tobit model to estimate the chance and magnitude of outward direct investment to Mainland China, respectively. The empirical results first show that companies with higher sales, R&D expenditures, and export ratio would be more likely to investment in Mainland China. Nevertheless, companies with more fixed assets would be less likely to invest in Mainland China.
Secondly, our study shows that sales, fixed assets, R&D expenditures, and export ratio all exhibit positively significant impacts on the magnitude of outward direct investment to Mainland China.
