The Role of Parent-Firm Characteristics in Affiliate Activities in South Korean Foreign Direct Investment |
| |
Authors: | Hongshik Lee Soonhyung Sim |
| |
Institution: | 1. Department of Economics, Korea University, Seoul, Republic of Koreahonglee@korea.ac.kr;3. Department of Economics, Korea University, Seoul, Republic of Korea |
| |
Abstract: | ABSTRACTWe 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). |
| |
Keywords: | multinational firms parent-firm characteristics |
|
|