Research Article
A Study on the Foreign Direct Investment Strategy and Overseas Technology Acquisition Performance of Domestic Manufacturers
Published: January 2000 · Vol. 29, No. 3 · pp. 315-336
Full Text
Abstract
In recent years, the most important source of competitiveness for both domestic and foreign firms has been the timely acquisition of necessary technologies amid rapidly changing market environments. Against this backdrop, recent studies have focused on foreign direct investment (FDI) as a means of acquiring advanced technologies from abroad. This is because FDI not only enables effective learning of location-specific tacit knowledge but also possesses superior knowledge-creation capabilities, such as the ability to transfer and integrate knowledge acquired by local subsidiaries through the firm's internal network to create new knowledge. However, research on such technology-seeking FDI is still in its early stages and has yet to provide theoretical and empirical explanations at the firm level for why FDI is effective in acquiring foreign technologies. Moreover, existing studies have overlooked the fact that a firm's performance in acquiring foreign technology may vary depending on its FDI strategy. Therefore, to address these limitations of prior research, this study classifies Korean firms' FDI strategies by the presence and degree of FDI and empirically analyzes how these strategies affect foreign technology acquisition performance from the perspective of FDI's knowledge-creation capabilities. The significance of this study lies in its potential to suggest new directions for FDI to Korean firms in the 21st century, where the importance of acquiring advanced technologies from abroad is increasingly growing.
