Abstract
Purpose – The purpose of this paper is to explore the relationship between the strategic fit of supply chains and the formulation of future strategies.Design/methodology/approach – This study focuses on Taiwanese investments in China and offers models based mainly on the transaction cost theory and the eclectic theory using data surveyed from 1,100 Taiwanese companies in China's Pearl River Delta (PRD) and the Yangtze River Delta (YRD).Findings – Strategic fit from the perspective of the degree of vertical integration and the degree to which a Taiwanese firm fits in the local supply chain can affect the propensity for strategic change. That is, strategic fits in internalization strategy for vertical integration and in localization strategy for fit in the local supply chain are related to how a firm formulates its future strategies. Industrial factors between technological sectors and non‐technological sectors, and geographical factors between the YRD and the PRD further reveal different levels of signific...
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