The Analysis of Technological Intra-Industrial Trade Competition and Trade Specialization

By Wang, Teng Kun | Journal of Global Business Issues, Spring 2008 | Go to article overview
Save to active project

The Analysis of Technological Intra-Industrial Trade Competition and Trade Specialization


Wang, Teng Kun, Journal of Global Business Issues


ABSTRACT

This study analyzed the international technological competition in Information Communication Industry (ICI) to explore the phenomena of intra-industrial trade effects. Owing to the high growth rate in ICI industry, but with no guarantee of increasing profit from greater competition, it is important to improve its advantage terms from international competition. Trade Specialization Coefficients (TSC) were calculated to realize the current situation of technological trade competition. Based on the discussion of Product Life Cycle (PLC) and Technology Life Cycle (TLC), the comparative advantage of ICI in Taiwan is decreasing, but it still enjoys export specialization. The empirical findings have shown that Taiwan lost the advantage of intra-industrial technological trade competition. Then, the Ownership-Location- Internalization (OLI) advantage theory is applied to illustrate the high-tech companies' management. Finally, some suggestions are provided for ICI in Taiwan to get more pragmatic consideration.

(ProQuest: ... denotes formulae omitted.)

l. Introduction

With the rapid development of high technology, most of the products in the Information Communication Industry (ICI) have entered into different stages of the product life cycle (PLC). Owing to the higher market demand for technological products in the developed countries, the multinational enterprises (MNEs) will choose foreign direct investment (FDI) to maintain or increase their market share. The information communication industries were welldeveloped in the new industrial countries (NICs), especially in the Asian- Pacific areas. It is the reason that this study will go further to discuss the phenomena of intra-industrial technological trade competition by using the Trade Specialization Coefficients to analyze the difference among them.

When high technology companies evaluated the terms of investment environment, most of them supported the government well organized policies, such as Asia-Pacific Regional Operations Centre Plan (APROC) in Taiwan (Kuo, 2002) to promote international trade and market openness. To integrate the industries of transportation, finance, telecommunication, manufacture, etc., and the degree of freedom for labour, capital, technology, the government decided to expand international markets and its industrial development, and to create a good investment environment to upgrade the competitive advantage by industries.

In accordance with the above discussion, this paper analyses the current technological trade competition in ICI, and generalizes the empirical outcomes to describe how the developed countries can maintain their industrial advantages. Lin's (2003) "Trade Specialization Coefficient (TSC)" is adopted to analyse the international competition in the ICI. Moreover, the product life cycle (PLC) and technology life cycle (TLC) will be combined to study the competition trend. Finally, John Dunning's (1996) "Ownership-Location-Internalization (OLI) Advantage Theory" is included for providing some useful suggestions for ICI enterprises in Taiwan.

2. Literature Review

Based on the development of technology, the Information Communication Industry has evolved from the tech-receiving country to the tech-transferring one under the PLC model; moreover, it would accumulate much FDI experience and capital stock during that period. As a result, MNEs will perform under the principle of comparative advantage and the theory of international industry division of labour in order to practice their FDI strategies (Caves, 2000). The development of FDI for MNEs generally increases the market share for the parent companies and its subsidiaries; furthermore, it also reduces the trade conflict between the home and host countries. To consider the maximization of national welfare, the home country has to adopt the international industry division of labour to elevate the effects of horizontal and vertical division of labour under the consideration of intraindustrial competition (Dussauge and Garrette, 2001)

2.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

The Analysis of Technological Intra-Industrial Trade Competition and Trade Specialization
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?