The Role of Small and Medium Sized Export Trading Companies in Taiwan's Economic Transition 1950-1990

Abstract

In the period from 1950 to 1990, the Taiwanese economy, which has become famous for its rapid growth, underwent many dramatic changes. This thesis examines the role of the small and medium sized export trading companies (SMETCs) in the transition of Taiwan's economy under its export-oriented policies. Taiwan's SMETCs not only acted as intermediaries between manufacturers and international buyers in the export channels but also provided strategic information relating to the global market and acted as an agent in changing the focus and direction of Taiwanese industries. They exercised significant power, leading Taiwanese industries into successive stages of globalization. Furthermore, SMETCs also pushed Taiwan into achieving both 'scale economies' and 'scope economies'. Taiwan's SMETCs provided the logistics for the famous Taiwanese subcontract domestic production networks. Under this manufacturing system, SMETCs helped to develop Taiwan's economy first from the stage of agricultural and processed products into labour-intensive light industry, then into the skilled labour-intensive industries of electronic and electrical assemblies, and finally into the capital-intensive high technology industries. The SMETCs have played a significant role in the staged development of the Taiwanese economy.