The destination of outward FDI and the performance of South Korean multinationals

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8 Citations (Scopus)

Abstract

This paper examines how the destination of outward foreign direct investment (FDI) affects South Korean multinational parent firms. We categorize host countries into those that are developed and those that are less developed. We find that destination matters for employment and capital intensity. FDI into less developed countries is negatively associated with a firm's employment and positively associated with its capital intensity. However, FDI into developed countries does not seem to matter: the parent firm's activities do not change significantly after FDI has been made. These results may indicate that Korean FDI into less developed countries is a relocation of production lines to overseas affiliates and FDI into developed countries is done to extend markets.

Original languageEnglish
Pages (from-to)59-66
Number of pages8
JournalEmerging Markets Finance and Trade
Volume46
Issue number3
DOIs
Publication statusPublished - 2010 May 1

Keywords

  • South Korea
  • foreign direct investment
  • multinationals

ASJC Scopus subject areas

  • Finance
  • Economics, Econometrics and Finance(all)

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