in exports. Such expansion requires capital, which is not available in sufficient quantities in Taiwan. Foreign capital for the expansion of the country's export oriented industries is most easily obtained in the form of direct foreign investment. Taiwanese government policy, however, discourages such foreign investment. Taiwanese business managers, thus, are placed in the unenviable position of seeking foreign capital under conditions least attractive to foreign investors.
Taiwan has a market economy. The Taiwanese government, however, acts to protect local producers from foreign competition, and generally exercises a more interventionist role in the country's economy than that which occurs in the United States (Rabushka, 1987). In this context, the relationship between the Taiwanese government and the economy's private sector follows much more closely the Japanese model than it does the American model. In many instances, government policy dictates the broad outlines of business strategy. Such situations are often stress
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