The comparative study of United States and Japanese direct foreign investment in Korean manufacturing industry
Date
1980
Authors
In, Hae Uck
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Canberra, ACT : The Australian National University
Abstract
The purpose of this thesis is to inquire into the significant features
of United States Direct Foreign Investment (DFI) and Japanese DFI in Korean
manufacturing industry and to compare the determinants, motivating factors,
and technology transfer associated with DFI. The hypothesis put forward by
Kojima provides a theoretical framework to test. This study examines three
propositions derived from Kojima's work. First, Kojima observed that United
States DFI is domestic-market-oriented and Japanes DFI is export-oriented ln
Korean manufacturing industry. Second, it is shown that DFI in Korea by
United States firms, especially by the large oligopolistic firms, is undertaken
mostly to exploit non-marketable, firm-specific advantage in production
technology, management and marketing. However, Japanese DFI is undertaken
primarily to exploit an advantage in location-specific marketing skill as
well as non-marketable and firm-specific. Third, Kojima (hypothesis III)
suggests that the United States level of technology transfer is higher than
that of Japan.
Methodology: SPSS (Statistical Package for the Social Sciences) was used
to find out whether or not there is a significant difference between the
United States level of technology transfer and the Japanese level of technology
transfer. The main focus of the case study of the machinery industry is
given to tabulating and crosstabulating countrY-by-technology level, countryby-
contents of technology transfer and country-by-periods by using the SPSS
technique. Signficant results can also be drawn from the empirical test.
First, the results are consistent with Kojima's observation that United States
DFI is domestic-market-oriented and Japanese DFI is export-oriented in Korean
manufacturing industry. Second, it is known that an advantage in locationspecific
marketing skill is not a significant condition for Japanese DFI.
Third, it appears that the major determinants of technology level by DFI depends
not only on firm-specificity but also (a) investment climate of the investing
country, United States or Japan (b) technology level of the host country
(c) comparative advantage in the host country (d) demand, market size of the
host country (e) industrial policy of the host government and the investment
climate of the host country. These are some of the factors which would have
to be taken into account beyond those identified by Kojima.
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Thesis (Masters sub-thesis)
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