Firm Heterogeneity and Location Choice: The Case of South Korean Manufacturing Multinationals

Jae-Joon Han (), Hongshik Lee () and Insu Lee ()
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Jae-Joon Han: Inha University
Hongshik Lee: Korea University
Insu Lee: Korea University

East Asian Economic Review, 2012, vol. 16, issue 4, 315-331

Abstract: Previous studies of location choice have focused on country-level data more than firm-level data and been more concerned with host countries' distinctive features than with firm heterogeneity. Therefore, they do not answer the question of who will go where in terms of location choice. To analyze the role of firm heterogeneity in determining location choice, we develop a theoretical model and analyze data on 3,644 Korean manufacturing multinationals operating in 87 countries between 1982 and 2006. The results of our conditional logit analysis indicate that not only host country characteristics but also firm heterogeneous factors such as productivity, labor intensity, and size have considerable influence on the decision of where to locate FDI.

Keywords: FDI; Firm Heterogeneity; Multinationals; Location Choice (search for similar items in EconPapers)
JEL-codes: F10 F20 R20 (search for similar items in EconPapers)
Date: 2012
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