An Evaluation Model for Foreign Direct Investment Performance of Free Trade Port Zones

Wen-Kai K. Hsu
Department of Shipping and Transportation Management, National Kaohsiung University of Science and Technology

Show-Hui S. Huang
Department of Incentives, Conferences, Exhibitions and Trade Marketing, Shu-Te University

Nguyen Tan Huynh
Department of Shipping and Transportation Management, National Kaohsiung University of Science and Technology; Faculty of Economics and Management, Dong Nai Technology University

Abstract

With the tendency of internationalisation and globalisation, signing regional economic agreements among multiple countries has become a trend. Under such an integration environment, some free economic zones with port transportation functions have become crucial for FDI (foreign direct investment) investors in selecting investment locations. The free trade port zone (FTPZ) is argued to be one of the most well-known. This paper aims to assess the FDI performance of FTPZs. On the basis of the FTPZ's features and relevant literature, assessment criteria (ACs) are initially identified. An evaluation model based on the fuzzy AHP (Analytic Hierarchy Process) approach is then introduced to evaluate the FTPZs' FDI performance from foreign investors' viewpoints. Finally, the FTPZ of the Kaohsiung port in Taiwan was empirically investigated to verify the assessment model. Results point out that for the FTPZ of Kaohsiung port, ACs with higher priorities needing improvement are raw material acquired, local government efficiency, and political stability and social security. Theoretical and practical recommendations for the FTPZ managers are discussed based on the results.