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

Hongshik Lee; Soonhyung Sim

doi:10.1080/1540496X.2015.1026711

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

Research output: Contribution to journal › Article › peer-review

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 language	English
Pages (from-to)	S11-S22
Journal	Emerging Markets Finance and Trade
Volume	51
DOIs	https://doi.org/10.1080/1540496X.2015.1026711
Publication status	Published - 2015 Jul 3

Bibliographical note

Funding Information:
This work was supported by National Research Foundation of Korea Grant funded by the Korean Government (2013S1A3A2054749).

Publisher Copyright:
Copyright © 2015 Taylor & Francis Group, LLC.

Keywords

multinational firms
parent-firm characteristics

ASJC Scopus subject areas

Finance
Economics, Econometrics and Finance(all)

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

Access to Document

10.1080/1540496X.2015.1026711

Cite this

@article{c7f70e8ad80a43098b57b654a0750b9a,

title = "The Role of Parent-Firm Characteristics in Affiliate Activities in South Korean Foreign Direct Investment",

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).",

keywords = "multinational firms, parent-firm characteristics",

author = "Hongshik Lee and Soonhyung Sim",

note = "Funding Information: This work was supported by National Research Foundation of Korea Grant funded by the Korean Government (2013S1A3A2054749). Publisher Copyright: Copyright {\textcopyright} 2015 Taylor & Francis Group, LLC.",

year = "2015",

month = jul,

day = "3",

doi = "10.1080/1540496X.2015.1026711",

language = "English",

volume = "51",

pages = "S11--S22",

journal = "Emerging Markets Finance and Trade",

issn = "1540-496X",

publisher = "M.E. Sharpe Inc.",

}

TY - JOUR

T1 - The Role of Parent-Firm Characteristics in Affiliate Activities in South Korean Foreign Direct Investment

AU - Lee, Hongshik

AU - Sim, Soonhyung

N1 - Funding Information: This work was supported by National Research Foundation of Korea Grant funded by the Korean Government (2013S1A3A2054749). Publisher Copyright: Copyright © 2015 Taylor & Francis Group, LLC.

PY - 2015/7/3

Y1 - 2015/7/3

N2 - 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).

AB - 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).

KW - multinational firms

KW - parent-firm characteristics

UR - http://www.scopus.com/inward/record.url?scp=84960108650&partnerID=8YFLogxK

U2 - 10.1080/1540496X.2015.1026711

DO - 10.1080/1540496X.2015.1026711

M3 - Article

AN - SCOPUS:84960108650

SN - 1540-496X

VL - 51

SP - S11-S22

JO - Emerging Markets Finance and Trade

JF - Emerging Markets Finance and Trade

ER -

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

Abstract

Bibliographical note

Keywords

ASJC Scopus subject areas

UN SDGs

Access to Document

Other files and links

Fingerprint

Cite this