Foreign direct investment from Korea

Abstract

seminal Hymer-Kindleberger hypothesis(7, 10) contended that FDI be analyzed

on firm specific monopolistic advantages in contrast to the country specific analyses

prevalent in trade theory and international capital movement theory. The

hypothesis became the cardinal analytical framework for FDI in ensuing years. \

Starting in the mid 1970's, however, there has been a growing movement to

view FDI flows as a country specific rather than firm specific phenomenon. On

theoretical ground, Dunning (5) claimed that the seemingly firm specific monopolistic

advantages are bred in respective home country environments and thus

multinational companies (MNC) from the same home country tend to have

similar monopolistic advantages. On empirical grounds, the once insurmountable

dominance of the U.S. in the FDI flow is fading and it is being replaced partly

by the rise of Japanese and Third Country MNCs. Concurrently, studies with

country specific titles such as Japanese MNCs or Third Country MNCs have

begun to attract scholarly interest.