The Role of Outward FDI in Creating Korean Global Factories

This article researches foreign direct investment (FDI) from South Korea in the context of the organization and development of local businesses into global factories. It analyzes the relationship between FDI decisions and the nature of Korean imports and exports. It contends that the mechanism by which FDI leads to technological upgrading can be explained by the global factory approach. This study employed a unique dataset containing information from South Korea on FDI motives and the unit value of traded goods within particular sectors. It highlights the underappreciated fact that trade destinations and trade unit prices affect FDI location and motivation.

This publication originally appeared as Peter J. Buckley, Nigel Driffield and Jae-Yeon Kim, “The Role of Outward FDI in Creating Korean Global Factories,” Management International Review, (2022). Copyright remains with the original holders. An Open Access version of the article is attached.