The evolution of South Korean outward FDI : internationalisation strategies, FDI motives, and location choice

This thesis aims to contribute to the understanding of the relationships between foreign direct investment (FDI) motives and the location choice of internationalising firms. Based on data from South Korea, this thesis comprises three empirical chapters examining, from different aspects, South Korean internationalisation. The first empirical chapter is conceptualised work, exploring how South Korean firms invest abroad. It covers the way in which South Korean firms give consideration to 1) the economic structure and the dynamic country specific advantages in the host and home countries, 2) the growth of firms in emerging countries, and 3) their own competitiveness through the strategic- use of assets such as technology. These location choice strategies very with the host countries. Additionally, it examines the Korean outward FDI model by distinguishing between the motives for FDI, and discusses the development over time of the relationship between South Korean FDI motive and location choice, and it then identifies trends. The second empirical chapter analyses, by motive, factors that influence South Korean firms to locate their foreign subsidiaries in China. It discusses the factors by province, and takes into account the impact of the global financial crisis upon the location choice (by Chinese province) of South Korean firms. The third chapter studies how South Korean firms locate their FDI in the United States in order to obtain a strategic asset. It examines the relative importance of various location determinants of Korean high-tech industries and knowledge-intensive services. Specifically, the empirical works study how Korean firms internationalise. South Korean outward FDI in developing countries is mainly for the purpose of efficiency-seeking and export promotion motives; these transform over time to efficiency-seeking and market-seeking. On the other hand, the initial motivations for investing in developed countries were strategic asset-seeking and export promotion motives; these then developed into strategic asset-seeking and market-seeking FDI