DOI QR코드

DOI QR Code

An Study on FDI Determinants by Foreign-Invested Companies in the Manufacturing Sector Based on Their Sales Path

제조업 외국인투자기업의 매출 경로에 근거한 한국 투자 결정 요인 분석

  • 이영선 (서울과학종합대학원, KOTRA ) ;
  • 신호상 (서울과학종합대학원 )
  • Received : 2020.03.19
  • Accepted : 2020.04.25
  • Published : 2020.04.30

Abstract

According to an analysis of 560 foreign-invested companies investing in South Korea's manufacturing industry, the following three facts were found. First, the proportion of sales by manufacturing foreign-invested companies is divided into 68.5 percent of domestic sales and 31.5 percent of exports. From 68.5 percent of domestic sales, sales to Korean companies are 60.5 percent, including 37.1 percent for large companies and 23.4 percent for small and medium-sized companies, while only 8.0 percent for domestic consumers. Second, the investment sectors of manufacturing foreign-invested enterprises are 'machine and equipment manufacturing', 'chemical and chemical-chemical material manufacturing-excluding pharmaceuticals', 'electronic components, computers, video, sound and communication equipment manufacturing' and 'vehicle and trailer manufacturing'. It overlaps with electric·electronics, petro-chemicals and automobiles, which are Korea's main industries and areas of Korean global companies. Third, 31.5 percent of the sales of foreign-invested companies in the manufacturing sector are exported. Foreign-invested companies export their products to use them for their parents or affiliates or to the third countries. The analysis shows that foreign-invested companies invested in Korea for B2B transactions with Korean companies. The implications are that Korea can attract foreign investments by utilizing Korean companies' demand for intermediate goods. Foreign-invested companies can invest in Korea in order to use Korea, which has signed free trade agreements with the US, the EU and ASEAN, as an export platform.

Keywords

References

  1. Alan M. Rugman (1981), "Reconciling Internationalization Theory and the Eclectic Paradigm, 18(1)
  2. Cho, Taek-Hee (2008), "Analysis on The Determinants of FDI Using Nonstationary Panel Data in Korea by Industry", Korea Review of Applied Economics, 10(1), 283~305.
  3. Choi, Nam-Suk (2015), "The Spillover Effect Analysis of Korean Multinational Enterprises' Global Value Chain Expansion on Knowledge-Based Manufacturing Industries", Journal of International Trade and Industry Studies, 20(4), 1~29.
  4. Chung, Joong-Kyu and Sang-Kook Han (2019), "A Study on the Importance of Determinants in the Technology Transfer of the Chemical Industry through International Joint-Ventures", Journal of Korea Technology Innovation Society, 22(2), 159~185. https://doi.org/10.35978/jktis.2019.04.22.2.159
  5. Dunning, J.H. (1998), "Location and the Multinational Enterprise: A Neglected Factor?", Journal of International Business Strudies, 29(1), 45~66 https://doi.org/10.1057/palgrave.jibs.8490024
  6. Ji, Young-Han (2016), "A Study on the Economic Impact of Focused on the Input-output Table in the FDI inflow", International Commerce and Information Review, 18(1), p.p. 235~258.
  7. Joung, Jae-Ik, Jong-Kook Park, Young-Eun Hong and Soo-Jin Kim (2019), "Designated as a Foreign Direct Investment and Earnings Management", Yonsei Business Review, 44(1), 87~99.
  8. Jung, Jin-Sup and Hwy-Chang Moon (2008), "Korea-U.S. FTA and Inward FDI Strategy of Korea", Korea Trade Review, 33(3), 185-216.
  9. Jung, Moo-Sup, Ji-Young Oh and Min-Chan Pyo (2014), "The Status and Policy Direction of Foreign Direct Investment Locations in Korea -From the Perspective of the GVC Development Stage Model-", Korean Academy of International Business Management, 15~53.
  10. Jung, Moo-Sup and Min-Chan Pyo (2016), "Location Competitiveness of Korea in the Perspective of GVC Development Path", Journal of Distribution and Management Research, 19(3), 51~59. https://doi.org/10.17961/JDMR.19.3.201606.51
  11. Kang, Tae-Koo (1994), "Foreign Direct Investment Theories and Internationalization of Korean Firms via International M&A : Theory and Evidence", Korea Trade Review, 19(2), 193~216.
  12. Kim, Seon-Sik (2010). "Systematic Classification of Approaches of FDI Theories", The Journal of Professional Management, 13(2), 49~70.
  13. Kim, Young-Tai and Sam-Mo Kang (2012), "Determinants of Foreign Direct Investment in Korea", The Journal of Social Science, 19(2), 179~204.
  14. Li, Jia-En, Ling Yin and Young-Jun Choi (2019), "Foreign Direct Investment (FDI), GVC Participation and Trade in Value Added", Korea Trade Review, 44(5), 107~125. https://doi.org/10.22659/KTRA.2019.44.5.107
  15. Seong, Kil-Yong (2019),"Survival Factors and Survival Rates of Foreign-invested Companies", Journal of the Korea Contents Association, 19(5), 287~295.
  16. UNCTAD (2013), "World Investment Report: Global Value Chain and Trade for Development"
  17. Yin, Wen-Yan (2018), "An Integration of Different Approaches to Global Value Chain", Institute of International Affairs, 27(2), 37-54.