this study outlines the solid production management capabilities (deriving from Taiwanese industry’s extensive experience with OEM production) as the main locational advantage encouraging multinationals to locate their regional R&D centers in Taiwan. The functions of R&D centers in Taiwan include product and production process innovation; the centers also function as bases for regional training and technology support. However, the small scale of Taiwan’s domestic market and the limited supply of human resources in the R&D sector constitute barriers that discourage foreign firms from setting up offshore R&D bases in Taiwan. In addition, the regulations governing travel to Taiwan by scientists and technicians from mainland China and Taiwanese R&D workers’ lack of an international outlook and generally unsatisfactory foreign language capabilities lead to increased costs for multinationals when coordinating cross-border research.
