Owning to financial liberalization and globalization, transnational transaction has become more frequent in Taiwan’s business. So far, the stock that foreign capital holds accounts for up to 30 percent of Taiwan stock value and the traded money accounts for nearly twenty percent of market share. Therefore, foreign ownership plays an important issue nowadays in the Taiwan’s stock market. In this study, we focus in traditional industry. Many people regard Taiwan’s traditional industry as a sunset industry and need to be transformed. The study use Data Envelopment Analysis (DEA) to evaluate the corporate performance. To confirm whether foreign companies will perform better than local companies in Taiwan’s traditional industry which based on 558 listed and over-the-counter (OTC) companies from 2010 to 2016, and the data are collected from Taiwan Economics Journal (TEJ). If the result shows that there is a positive relationship between foreign ownership and corporate performance, the government can think how to attract more foreign investors to invest in our local companies to improve and help our traditional industry.
The empirical results show that foreign companies perform better than local companies does in Taiwan’s traditional industry which is in line with the expectation.
