Abstract

This paper presents a novel study which used piecewise statistical approach to estimate the profitability of Taiwan-based corporations investing in China according to their proportion in the total numbers of Taiwanese managers. While using the SPSS statistics software to analyze and calculate the correlation between the earnings, expenditures, proportion of Taiwanese cadres and net profits, it was found that the higher proportion in the total numbers of Taiwanese managers, the higher company earnings and expenditures, and hence, it could indirectly influence net profits. In addition, while using the multiple regression analysis to calculate the R-squared values and also analyzing and comparing the differences in relative data, it showed that the proportion of Taiwanese cadres would have significant influence on the organization’s net earnings during the stabilization period. Furthermore, it was feasible to obtain, using the piecewise quadratic programming, the optimal solution in terms of the proportion (80% for overall development period and 63% for the stabilization period) of Taiwanese cadres for Taiwan-based corporations while investing in China in order to ensure the largest net profits for the companies.

Key words: Multiple regression, piecewise programming, statistical significance, workforce allocation.