Trilateral Governance in International Industrial Cooperation Programs
Date Issued
2009
Date
2009
Author(s)
Shen, Wei-Cheng
Abstract
A trading offset transaction in which a foreign contractor is obliged to feed back the domestic companies in return for its successful business bidding under an overseas government procurement project is known as Industrial Cooperation Program (ICP) in Taiwan.his activity involves three parties, namely, the foreign contractor, the government and the domestic companies. A questionnaire survey was conducted in this study to collect the data of domestic organizations that have been engaged in the ICP over the last 20 years. In total, 175 copies of the questionnaire were returned. According to a statistical analysis of the collected data with the software programs of SPSS 12 and LISREL 8.71, this study has found:. Even if a domestic organization fails to have a full comprehension of the capability of a prospective foreign contractor, it can still engage in the ICP with a deep understanding of the government policy. Meanwhile, the ICP helps domestic organizations increase their knowledge and opportunities to be closely connected with the enterprises abroad. . In the most complicated model of cooperation between local and overseas enterprises, a domestic organization is expected to pay no or little pre-assessment cost with the support of the government. In contrast to a general theory of any transaction entailing costs, this process requires a new way of thinking.. It has been empirically shown first in Taiwan that enterprises can enjoy a satisfactory business partnership if the government which takes every transaction defensive measure to ensure the performance of its policy is acting as a supervisor of the trilateral governance business cooperation. . It is essential for the government to intervene to resolve disputes between a domestic organization and a foreign contractor under the framework of ICP. However, such government intervention generally achieves limited cooperative effectiveness. . It has been empirically confirmed first in Taiwan that offsets can overcome concerns arising from information asymmetry, ethical risks and inconsistent timing of decisions in a transaction. Most organizations that have been engaged in the ICP can have their cooperative results effectively internalized and transformed into their system of operations and management. ccordingly, while domestic enterprises involved in the ICP considerably reduce their costs for business transactions with foreign contractors, they are expected to improve their communicative proficiency in order to consolidate such partnerships. Finally, it is only on the basis of mutual trust can a domestic organization raise its own competitiveness.
Subjects
Countertrade
Offset
Industrial Cooperation
Transaction Cost
Trilateral Governance
Knowledge Management Effectiveness
Partnership
Type
thesis
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