Firm Heterogeneity and Location Choice: The Case of South Korean Manufacturing Multinationals

17 Pages Posted: 29 Aug 2013 Last revised: 7 Nov 2016

See all articles by Jae Joon Han

Jae Joon Han

Inha University

Hongshik Lee

Korea Institute for International Economic Policy (KIEP)

Insu Lee

Korea University

Date Written: December 26, 2012

Abstract

Previous studies of location choice have focused on country-level data more than firm-level data and been more concerned with host countries’ distinctive features than with firm heterogeneity. Therefore, they do not answer the question of who will go where in terms of location choice. To analyze the role of firm heterogeneity in determining location choice, we develop a theoretical model and analyze data on 3,644 Korean manufacturing multinationals operating in 87 countries between 1982 and 2006. The results of our conditional logit analysis indicate that not only host country characteristics but also firm heterogeneous factors such as productivity, labor intensity, and size have considerable influence on the decision of where to locate FDI.

Keywords: FDI, Firm Heterogeneity, Multinationals, Location Choice

JEL Classification: F1, F2, R2

Suggested Citation

Han, Jae Joon and Lee, Hongshik and Lee, Insu, Firm Heterogeneity and Location Choice: The Case of South Korean Manufacturing Multinationals (December 26, 2012). Journal of East Asian Economic Integration, Vol. 16, No. 4 (December 2012) 315-331 , Available at SSRN: https://ssrn.com/abstract=2317189 or http://dx.doi.org/10.2139/ssrn.2317189

Jae Joon Han

Inha University ( email )

253 Yonghyun-dong
Nam-gu Incheon 402-751, Incheon
Korea, Republic of (South Korea)

Hongshik Lee (Contact Author)

Korea Institute for International Economic Policy (KIEP) ( email )

[30147] Building C, Sejong National Research Compl
Seoul, 370
Korea, Republic of (South Korea)

Insu Lee

Korea University ( email )

1 Anam-dong 5 ka
Seoul, 136-701
Korea, Republic of (South Korea)

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