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An Exploratory Study on the Internationalization Process of Korean Home Electronics Firms

Yoon, Dongjin · Jeon, Yonguk

Published: January 1998 · Vol. 27, No. 2 · pp. 541-561
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Abstract

This paper is an exploratory study that aims to identify the distinctive characteristics of the internationalization drivers and patterns of Korean consumer electronics firms and to explain them using the concept of "strategic rigidity." Through a longitudinal analysis of annual foreign direct investment data and a literature review of three major Korean consumer electronics companies, the study examined the diversification of host regions, the sophistication of entry modes, and the diversification of products for overseas markets. The results reveal characteristics that differ from the drivers and patterns assumed by existing theories. Korean consumer electronics firms, which began their internationalization based on OEM exports of global products to advanced countries, show patterns where investment in advanced countries preceded investment in developing countries, the entry processes for advanced and developing countries are distinctly differentiated, and global products are the first to be locally manufactured. Moreover, rather than a gradual and sequential pattern of internationalization based on the accumulation of direct experience and knowledge of local markets, these firms exhibit a pattern of rapid internationalization driven within a short period by environmental factors. Therefore, this study explains the internationalization process of Korean consumer electronics firms as a hysteresis phenomenon arising from large-scale irreversible fixed investments—a process of pursuing corporate growth under strategic rigidity.