Who Goes Where and How? Firm Heterogeneity and Location Decision of Korean Multinationals

Hea-Jung Hyun and Jung Hur

No 10-11, Working Papers from Korea Institute for International Economic Policy

Abstract: This paper examines the role of firm heterogeneity in multinationals' choice of FDI type and location. Using Korean firm-level data, we find that more productive firms are more likely than their less efficient counterparts to invest in tough markets and choose horizontal FDI against vertical or export-platform FDI across different host countries. These findings, consistent with the recent theories in international economics, suggest that firm heterogeneity may play a significant role in FDI strategy as well as location decision.

Keywords: Multinationals; Firm Level; Foriegn Direct Investment; Firm Heterogeneity; FDI Type; Location Decision (search for similar items in EconPapers)
JEL-codes: D22 F23 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2010-12-30
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