Value Chain and Networks of Foreign Direct Investment Firms in Transitional Economies : Korean Textile and Clothing Foreign Direct Investment in Vietnam

Abstract

As strategies for creating profits are differentiated by the national economic system and development strategies related to firms geographical scope, they depend on the spatial contexts and product characteristics. In this perspective, strategies for the profit creation of

Korean textile and clothing FDI firms invested in Vietnam has involved in the geographical differentiations in accordance with the development path of transitional economies, changes in institutional environments and the characteristics of products. Therefore, the main purpose of this research is to identify the way in which they have their own identity in transitional economies by investigating business pattern, commodity chain and extrafirm relations, which are related to institutional dynamics in Vietnam There are two main characteristics of Korean textile an[ l clothing FDI firms in Vietnam. The first is that all business activities involved in the commodity chain of them from R&D to production is controlled by global retailer and distributors, which is the buyer-driven commodity chain and the typical commodity chain of the textile and clothing industry. The second could be defined as over- or unforced embeddedness into the institutional legacy of the Soviet system, because they have been incorporated into pre-existing networks based on reciprocal relations in Vietnam.