Sangcheol Song

Performance, Partner Relationship, and Ownership Change in International Joint Ventures: The Case of Korean Firms in Asia

This article examines how interorganizational factors in two-party international joint ventures (IJVs) affect subsequent IJV ownership changes. It specifically examines the primary impact of IJV performance and the moderating impacts of initial ownership structures, and duration. Utilizing a data set of Korean foreign direct investment, the authors find that the ownership structures of IJVs with lower performance are more likely to change. The authors also find that unbalanced ownership promotes subsequent ownership changes, whereas longer IJV duration retards ownership changes in even lower-performing IJVs. The findings imply that relational changes reflected in IJV ownership depend on shared bargaining power and relational solidarity.

U.S. MNE Firm-Specific Advantages and Inter-regional expansion

This study examines how characteristics of firm-specific advantages (FSAs) and locational advantages affect the international expansion of multinational enterprises (MNEs) at the inter-regional level. The conceptual framework expands on Rugman and Verbeke’s original model. We examine the impact of location-bound FSAs as reflected in sales productivity of domestic labor forces, non-location bound FSAs as reflected in cross-border intra-firm sales, FSA fragmentation as reflected in unrelated diversification, and complementary resources as reflected in employees concentrated in host regions on US MNEs’ sales in other regions including EU and Asia- pacific. For empirical testing, we used and compared industry and firm level panel data. We find that location-bound FSA and unrelated diversification hinder expansion to other regions, while non-location bound FSAs and host region complementary resources facilitate expansion to other regions. This study contributes to the literature on company internationalization...

Do multinational corporations flexibly respond to exchange rate fluctuations? A tale of two Korean MNCs

Purpose – The purpose of this paper is to examine whether Korean multinational corporations (MNCs) in the electronics and steel industries do shift their production across their foreign subsidiaries, located in different countries, as exchange rates fluctuate in foreign countries.Design/methodology/approach – A case study was taken as a qualitative methodology to examine whether MNCs actually shift their production as multinational operational flexibility perspective predicts.Findings – From a case study of two Korean MNCs (LG Electronics and POSCO), it was found that even facing heightened production costs associated with host country currency appreciation, Korean MNCs do not shift their production to less costly locations due to industrial characteristics, limited capacity, and high tariff barriers. It was also found that they reduce the production costs internally and they also negotiate the costs with employees and suppliers to adjust the production costs associated with appreciated currency.Practical...