A Study of the Choice of the Technology Strategy in the Taiwanese Industry: The Multinomial Logit Model

The Multinomial Logit model is employed in this study to examine the relationship of the choices of technology strategies adopted by the manufacturing firms in Taiwan. The technology strategies are divided into four categories: "both R&D and purchased technology", "only R&D", "only purchased technology", and "none of R&D and purchased technology". Based on the data from the manufacturing survey of 2001 Industry, Commerce and Service Census, the empirical results in this study suggest that the willingness of choosing technology strategies is found in those larger firm size companies; at a higher ratio of skilled labors, and at a higher ratio of export. More specifically, in contrast to the firms with "only R&D", firms with larger firm size and older firm age tend to engage in "both R&D and purchased technology"; firms with a smaller firm size, at a lower ratio of skilled labors, and with more foreign direct investment tend to engage in "only purchased technology".