Academic journal article Journal of International Business Research

Modeling the Transfer of Technology to Taiwan from China

Academic journal article Journal of International Business Research

Modeling the Transfer of Technology to Taiwan from China

Article excerpt

ABSTRACT

For decreasing their cost, the Taiwan's traditional industries' companies move their production base to the areas the income is lower. In the meantime, the China's technological research and development departments lack the expenditure to maintain their operation. This study wants to know how let the Taiwan's companies cooperate with the China's technological research and development departments. This study found the Taiwan's companies cooperate with the China's research and development departments because the technologies they need are too advanced or the other country's' companies they own this technology ask higher prices. The objects the Taiwan's companies cooperate with are including not only the companies but also the research and development departments. The models they use are including buying in the market, alliance and cooperating between the companies. From these foundlings of this study, we found five propositions:

1. The ability to absorb technical knowledge influences the method used to build such knowledge.

2. The industry life cycle affects the type of technical knowledge transfer.

3. Those whose technical knowledge has relatively little external exposure will bring in large numbers of specialized personnel from Mainland China; in the case where the technical knowledge has relatively high external exposure, the manufacturers will tend to not bring in specialized personnel from Mainland China.

4. The manufacturer's ability to absorb technology affects the manufacturer's ability to bring in specialized personnel from Mainland China to assist the manufacturer in receiving technical knowledge.

5. Manufacturers that prepare tenders for the transfer of technology that have relatively high external exposure will resort to purchases in the market and strategic alliances, while manufacturers that prepare tenders for the transfer of technology that have relatively low external exposure will adopt the external assistance/ internal R&D approach.

INTRODUCTION

After Communist China and the former Soviet Union broke up with each other, the former Soviet Union not only stopped providing the Communist Chinese with assistance, but it also suddenly cut off China's main source of technology. In view of its defense requirements, Communist China was thus forced to rely on its own ability to develop various kinds of technology. However, as reforms were slowly introduced, the focus of the research activities of the research units at various levels of government and also among domestic enterprises shifted from being primarily defense-oriented to that where equal consideration was given to both defense and the people's livelihood. Furthermore, in certain specific areas, Communist China's technology was already as good as that of the advanced countries, while many people were trained as basic-level technicians and R&D personnel. However, in later years as the economic reforms and market-opening policies were implemented, not only did many publicly-run institutions go bankrupt, but also the national budget was used up. In an attempt to economize on national expenditure and enable public enterprises to survive, the vast majority of research units were forced to accept market competition, and hence they maintained a relatively positive attitude towards technological cooperation and technology transfer.

In the past, Taiwanese manufacturers were able to obtain the technical knowledge that they needed from the industrialized nations, including European countries, the U.S. and Japan. However, as Taiwan has become stronger in terms of its production, manufacturing and R&D activities, it has gradually placed greater emphasis on value added within the overall value cycle. Taiwanese manufacturers are now finding it increasingly difficult to obtain the technical knowledge that they need from the advanced countries, as was the case in the past. …

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