Abstract
This paper examined the effects of a FDI on a host county's trade balance and the local-linkages relative to various of types of FDI projects, i.e., vertical FDI projects vs. horizontal FDI projects. It was assumed that the effects of FDIs on host country's economy are different with regard to a vertical vs. horizontal FDI project. Based on 108 FDI projects undertaken by Korean firms, it was found that vertical investment projects have a greater effect on both the export-creation and import-creation than with horizontal investment projects. Horizontal foreign investment projects, however, have a greater effect than vertical foreign investment projects with respect to local-linkages. These findings suggest that the host government policy (e.g., incentives or regulations) toward inward FDIs should be differentiated by the types of FDI projects based on the different contributions made to the host country economy.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
