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The effect of host country Internet infrastructure on foreign expansion of Korean MNCs

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  • Seung-Hyun Lee
  • Chang Hoon Oh
  • Jeoung Yul Lee

Abstract

This study examines the effect of host country Internet infrastructure on a multinational corporation (MNC) foreign expansion. Using Heckman’s selection model on a sample of 2589 subsidiaries of 487 Korean MNCs between 1990 and 2011, we find that host country Internet infrastructure is important in MNC expansion decisions. In addition, we find that a well-developed Internet infrastructure within a host country leads to more investments from MNCs producing consumer over industrial goods and is more attractive to domestic market followers than market leaders. We find that the host country’s Internet infrastructure is important for an MNC foreign expansion decision, suggesting that efficient communication within an MNC is critical in coordinating globalized MNC subsidiary operations.

Suggested Citation

  • Seung-Hyun Lee & Chang Hoon Oh & Jeoung Yul Lee, 2017. "The effect of host country Internet infrastructure on foreign expansion of Korean MNCs," Asia Pacific Business Review, Taylor & Francis Journals, vol. 23(3), pages 396-419, May.
    • Handle: RePEc:taf:apbizr:v:23:y:2017:i:3:p:396-419
    DOI: 10.1080/13602381.2016.1156295
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    1. James R. Markusen, 2004. "Multinational Firms and the Theory of International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262633078, December.
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    Cited by:

    1. Mara Bergamaschi & Cristina Bettinelli & Elena Lissana & Pasquale Massimo Picone, 2021. "Past, ongoing, and future debate on the interplay between internationalization and digitalization," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 25(4), pages 983-1032, December.
    2. Lee, Jeoung Yul & Jiménez, Alfredo & Yang, Young Soo & Irisboev, Ilkhom, 2022. "The evolution of emerging market firms and time until subsidiary exit: Competitive dynamics of domestic market followers and contingency factors," Journal of Business Research, Elsevier, vol. 145(C), pages 694-704.

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