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

Author

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  • Han , Jae-Joon

    (Inha University)

  • Lee, Hongshik

    (Korea University)

  • Lee , Insu

    (Korea University)

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.

Suggested Citation

  • Han , Jae-Joon & Lee, Hongshik & Lee , Insu, 2012. "Firm Heterogeneity and Location Choice: The Case of South Korean Manufacturing Multinationals," East Asian Economic Review, Korea Institute for International Economic Policy, vol. 16(4), pages 315-331, December.
    • Handle: RePEc:ris:eaerev:0065
    DOI: 10.11644/KIEP.JEAI.2012.16.4.253
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    Keywords

    FDI; Firm Heterogeneity; Multinationals; Location Choice;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General

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