generalizeddoublediamondmodelapproachestoTaiwanandKorea.doc

AN INTERNATIONAL COMPARISON OF EMPIRICAL GENERALIZED DOUBLE DIAMOND MODEL APPROACH TO TAIWAN AND KOREA Day-Yang Liu, Hsin-Fang Hsu Department of Business Administration, National Taiwan University of Science and Technology No. 43 Sec. 4, Keelung Rd., Taipei, Taiwan 106 E-mail: liudy@.tw ABSTRACT Ⅰ. Introduction Government usually plays an important role in the environment of business competition. One perspective might be the government regulations have governed the rules of game as an environment for business to follow and fairness and efficiency are two guiding principles to establish certain appropriate rules and games. However, sometimes government sets up industrial policy to make certain industries develop and grow in a faster path through various economic incentives such as interest subsidies, tax credit and other non-financial incentives. All these efforts are targeting to increase national competitiveness by selectively taking certain industries with higher industrial linkage effect. Michael E. Porter has defined “competitiveness” as a proxy for “national productivity,” it is the major sources of national income and it also represents living standard in the long run. Therefore, in order to increase national productivity and living standard, business private sector can make quite a difference by keeping up innovation speed and produces goods and services which meets the needs of human beings. Taiwan and Korea have always competed against each other in economic performances for decades. From January to July of 2005, Taiwan’s export grows with only 6.6% and it trails behind Hong Kong (11.7%), Korea (10.8%), Singapore (14%) and finishes in the last place. Furthermore, more and more Taiwanese firms moved overseas, especially to Mainland China area and it ends up with a typical industry value chain, i.e., production overseas and doing business at home and these features have also worried about Taiwan’s national competitiveness to decline possibility.