This study investigates firstly the moderating effects of the liability of foreignness of foreign-invested firm on the relation between its firm-specific advantages (FSAs) and performance in Korea, and secondly how these moderating effects differ depending on the types of FSAs. It begins with the assumption that the liability of foreignness hinders exploitation of FSAs in a host country. Embeddedness, legitimacy, and strategy of foreigninvested firms are employed as moderating factors since these directly increase or reduce the level of liability of foreignness as asserted in previous related studies. The FSAs are classified into globally applicable FSAs and locally applicable FSAs depending on limitation on locational application. Data with 139 foreign-invested firms in Korea was tested. The major empirical results are summarized as follows. First, embeddedness positively moderates the relationship between locally applicable FSAs and firm performance. This result shows that foreign-invested firms can overcome the liability of foreignness by exploiting locally applicable FSAs when they are embedded in a host country network, and even improve their performance. Second, legitimacy of foreign-invested firms does not influence on the liability of foreignness. Market globalization has weakened boundaries between foreign and national firms thus, legitimacy is not questioned for foreign-invested firms to remove discrimination against foreign firms. Third, as expected global strategy facilitates the exploitation of foreign-invested firms’ globally applicable FSAs.