Corea Y La Crisis Mundial
The Shifting Location Decisions of Korean Outward FDI
Jungmin Kim* Ph.D. Candidate International Business and Strategy College of Business Administration Seoul National University jungmin2@snu.ac.kr
Dong Kee Rhee Professor International Business and Strategy College of Business Administration Seoul National University rheedong@snu.ac.kr
September 1, 2008 * Correspondence to: Jungmin Kim, Room.309, College of Business Administration, Seoul National University, 599 Gwanak-ro, Gwanak-gu, Seoul 151-916, Korea. Tel. +82-11-339-8209; Email: jungmin2@snu.ac.kr The Shifting Location Decisions of Korean Outward FDI
ABSTRACT
Korea has clearly moved from being developing county to one of developed countries. In the context of investment development path developed by Dunning, we examine the important factors for the locational decisions of Korean outward foreign direct investment, considering host countries at very different stages of economic development. In line with this objective, this paper tests empirically the determinants of Korean outward investment using macro economic factors of host countries along with the two Korean business group case studies, namely, Samsung and LG. Thus, this paper seeks locational changing trends of Korean outward FDI as firm strategy considerations. We test our hypotheses using official Korean outward FDI data collected from 1994 to 2005. The behavior of Korean investment showed several distinctive features. The statistical analysis of investments by Korean firms revealed significant changes in the regional investment of FDI, and changed of its traditional determinants as well. From the empirical tests and the two case studies, we found out that the dynamic effects of economic development have influenced on the shifts of outward FDI characteristics.
Key words: Korean outward FDI, theory of FDI, location decisions, MNE firm strategy
INTRODUCTION
Our argument starts the Korean outward FDI possesses unique characteristics
Jungmin Kim* Ph.D. Candidate International Business and Strategy College of Business Administration Seoul National University jungmin2@snu.ac.kr
Dong Kee Rhee Professor International Business and Strategy College of Business Administration Seoul National University rheedong@snu.ac.kr
September 1, 2008 * Correspondence to: Jungmin Kim, Room.309, College of Business Administration, Seoul National University, 599 Gwanak-ro, Gwanak-gu, Seoul 151-916, Korea. Tel. +82-11-339-8209; Email: jungmin2@snu.ac.kr The Shifting Location Decisions of Korean Outward FDI
ABSTRACT
Korea has clearly moved from being developing county to one of developed countries. In the context of investment development path developed by Dunning, we examine the important factors for the locational decisions of Korean outward foreign direct investment, considering host countries at very different stages of economic development. In line with this objective, this paper tests empirically the determinants of Korean outward investment using macro economic factors of host countries along with the two Korean business group case studies, namely, Samsung and LG. Thus, this paper seeks locational changing trends of Korean outward FDI as firm strategy considerations. We test our hypotheses using official Korean outward FDI data collected from 1994 to 2005. The behavior of Korean investment showed several distinctive features. The statistical analysis of investments by Korean firms revealed significant changes in the regional investment of FDI, and changed of its traditional determinants as well. From the empirical tests and the two case studies, we found out that the dynamic effects of economic development have influenced on the shifts of outward FDI characteristics.
Key words: Korean outward FDI, theory of FDI, location decisions, MNE firm strategy
INTRODUCTION
Our argument starts the Korean outward FDI possesses unique characteristics
References: Buckley, P.J. and Casson, M.C. (1976) The Future of the Multinational Enterprise, London: 19 20 Hennart, J-F(1991) ‘The Transaction Cost Theory of the Multinational Enterprise,’ in Christos N Source: Dunning and Narula (2000) Table 2 the Proxy of Korean Outward FDI