Extra-Firm networks and Korean investment in the United States

Abstract

This paper focuses on Korean firms' relationships with extra-firm institutional actors through an investigation of their international investment in the United States. The study draws from two surveys that were conducted in 2004. The first survey was conducted on US State Offices of Trade and Investment (SOTI) in Seoul, and the second survey on Korean subsidiaries that are located in the United States. The results indicate that extra-firm relationships are perceived to be much more important by US SOTIs. Several offices correlate the presence of Korean investment in their home states to the offices' activities with Korean parent companies in Seoul arising from synergies created with other Korean institutional actors. Korean subsidiaries in the United States do not evaluate competition between places to be as important in their locational decision; however, regular intra-firm discussions of country-specific policies are found to correlate with perceived firm-level benefits from locational choices. The results further suggest a shift in traditional control of extra-firm interactions from the headquarters in Seoul to the subsidiary in the United States. © 2008 Royal Dutch Geographical Society KNAG.