Location decision of Korean manufacturing FDI: A comparison between Korean chaebols and non-chaebols

Young Ryeol Park, Jeoung Yul Lee, Sunghoon Hong

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Abstract

This study analysed the location selection determinants of Korean foreign direct investment (KFDI) from the perspectives of OLI paradigm and resource- and knowledge-based views. The study involved a sample of 1911 Korean multinational enterprises (MNEs) and their 3095 foreign subsidiaries during the period of 1999 2004. Specifically, the study compared the differences of foreign direct investment (FDI) location decisions (1) between less-developed and developed countries (LDCs and DCs) and (2) between chaebols and non-chaebols. The results showed that the partitioned sample model of chaebols versus non-chaebols was found to have more detailed effects on the location decision between the two regions than the combined full sample model. In addition, the results showed that there are clear, effectual differences for subsidiary scale and prior host country experience between chaebols and non-chaebols.

Original languageEnglish
Pages (from-to)123-138
Number of pages16
JournalGlobal Economic Review
Volume40
Issue number1
DOIs
Publication statusPublished - 2011 Mar 1

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All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Economics, Econometrics and Finance(all)
  • Political Science and International Relations

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