How Information from Taiwan-based Enterprises in China Influences Investment Decisions of China-based Service Enterprises in Taiwan

This study yielded insights based on eight China-based service enterprises that entered the overseas Chinese market through greenfield investment. We found that some of the China-based service enterprises explore the internationalization information from Taiwan-based enterprises in China, which operated through trade, outsourcing and joint ventures. Most cases of SOEs, including airlines, wholesale & retail, restaurant and banking, the investment decision was made in full awareness of the institutional driving factor of ECFA. China-based service enterprises owned by local government and venturing in Taiwan are more likely to depend on personal or partner networks of Taiwan-based enterprises in China, than on due diligence process. They intend to venture into the overseas Chinese market for their outward FDI. Our findings and propositions are important for China-based service enterprises’ outward FDI. Asian host countries can improve their understanding of how to influence the FDI of China-based service enterprises through their home-country-based enterprises in China, helping to mitigate their liability of foreignness by means of personal or partner networks.