The Role of Parent-Firm Characteristics in Affiliate Activities in South Korean Foreign Direct Investment

Hongshik Lee, Soonhyung Sim

Research output: Contribution to journalArticle

Abstract

We examine the role of parent-firm characteristics in affiliate activities, including local sales, exports to Korea, and exports to third countries. We find that parent-firm characteristics apparently affect the selling behaviors of affiliates. First, affiliate local sales increase with higher research and development (R&D) intensity and capital intensity but with lower parent wages. Affiliate exports to Korea decrease with higher capital intensity and lower wages, and affiliate exports to third countries rise with higher R&D intensity. We also analyze the extent to which affiliate activities are influenced by country and industry characteristics, and the results coincide with those of conventional motivations for foreign direct investment (FDI).

Original languageEnglish
Pages (from-to)S11-S22
JournalEmerging Markets Finance and Trade
Volume51
DOIs
Publication statusPublished - 2015 Jul 3

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Keywords

  • multinational firms
  • parent-firm characteristics

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)
  • Finance

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