An analysis of Taiwanese banks' foreign direct investment timing in Japan: The role of external environmental factors

Wu-Hua Chang
Additional contact information
Wu-Hua Chang: Associate Research Fellow,Division of National Security Research,Institute for National Defense and Security Research

International Journal of Research in Business and Social Science (2147-4478), 2025, vol. 14, issue 1, 58-64

Abstract: Taiwan's banking sector operates in a highly competitive market with narrow profit margins, creating significant pressure for internationalization. This study investigates the external environmental factors influencing the timing of Taiwanese banks' foreign direct investment (FDI) in Japan, with a particular focus on geopolitical risks. The research, based on secondary data analysis and in-depth interviews with senior executives from four Taiwanese banks that have recently invested in Japan, finds that key drivers such as the U.S.-China trade war, supply chain restructuring, Taiwan's New Southbound Policy, changes in Japan's defense and economic security policies, as well as the depreciation of the yen, widening interest margins, and Japan's policy support, play a crucial role in shaping the timing of these investments. Notably, geopolitical risks emerge as a significant determinant in FDI timing decisions. By highlighting the importance of geopolitical risks, this study contributes to the theoretical framework of FDI timing and recommends further research on cross-industry and investment performance to refine analytical framework for FDI timing in a fragmented global economy. Key Words:timing of foreign direct investment, Taiwanese banking industry, geopolitical risks, Japan

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ssbfnet.com/ojs/index.php/ijrbs/article/view/3868/2663 (application/pdf)
https://doi.org/10.20525/ijrbs.v14i1.3868 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rbs:ijbrss:v:14:y:2025:i:1:p:58-64

Access Statistics for this article

International Journal of Research in Business and Social Science (2147-4478) is currently edited by Prof.Dr.Umit Hacioglu

More articles in International Journal of Research in Business and Social Science (2147-4478) from Center for the Strategic Studies in Business and Finance Editorial Office,Baris Mah. Enver Adakan Cd. No: 5/8, Beylikduzu, Istanbul, Turkey. Contact information at EDIRC.
Bibliographic data for series maintained by Umit Hacioglu ().