Lee, T. Y., Chiao, Y. C., Shih, H. Y., Chiu, Y. C., Cheng, K. H., and Cho, T. S. 2010. Contagion Effects of the Sequential FDI Trajectory: A Social Network Analysis. NTU Management Review, 21 (1): 083-112
Tai-Yu Lee, Doctoral Candidate, Department of Business Administration, National Chung Hsiung University
Yu-Ching Chiao, Associate Professor, Department of Business Administration, National Chung Hsiung University
Hsin-Yu Shih, Associate Professor, Department of International Business Studies, National Chi Nan University
Yi-Chia Chiu, Associate Professor, Department of Business Administration, National Chung Hsiung University
Keng-Hsiang Cheng, Ph.D. Student, Department of Business Administration, National Chung Hsiung University
Ta-Shun Cho, Doctoral Candidate, Department of International Business Studies, National Chi Nan University
Abstract
This study presents a quantitative method for illustrating the sequential FDI location choices within China by using methodologies derived from social network analysis. This method's numerous techniques and indicators offer many advantages by measuring the link between nodes to demonstrate the structural patterns of a connected system. We employed the 'contagion effect' on diffusions to explain FDI trajectory within a country. It is examined by two different models: the cohesion model, which is based on the diffusion by complementarities perspective, and the structural equivalence model, which is based on the diffusion by competitiveness perspective. We empirically tested a sample data of Taiwanese high-tech firms during the period from 1996 to 2006. Our analytical results showed that the Taiwanese firms' sequential FDI trajectory is influenced by the competitive locations of the same social positions and the regional characteristics of FDI information and infrastructure.
Keywords
sequential FDI social network contagion effect