This study addresses why small parties nominate candidates to run in the district elections and how nomination of district candidates could influence small parties’ share of party votes in Taiwan. Previous studies on party's strategic entry in the mixed electoral system demonstrate the existence of ‘contamination effect’ in various Western democracies. While ‘contamination effect’ suggests that party would gain more proportional representation (PR) seats by increasing its number of candidate nomination in the single-member-district (SMD) races, we contend that small parties should also take the strength of nominated candidates into consideration. Nominating strong candidates in SMD competitions could generate positive ‘spillover effect’ to party's PR tier. By focusing on the 2016 Taiwan legislative election, our findings suggest that first, small parties need to fulfill the institutional requirements in order to qualify for running in the party-list election; second, the ‘contamination effect’ exists in Taiwan, but it is conditional; and finally, candidates’ strength creates positive ‘spillover effect’ on party's proportional seats.