Korea Trade Review (무역학회지)

Korea Trade Research Association (한국무역학회)
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An Empirical Analysis on Determinants of Firm Value for Korean Companies to Invest Latin America

국내 기업의 중남미 진출을 위한 기업가치 결정요인에 대한 실증분석

  • Lee, You-Kyoung (Department of Business School, Universidad Tecnica Federico Santa Maria) ;
  • Kim, Ari (Institute of International Business and Governance, The Open University of Hong Kong)
  • 이유경 (페데리코 산타 마리아 대학교) ;
  • 김아리 (홍콩 공개대학교 국제 비즈니스 및 거버넌스 연구소)
  • Received : 2018.11.05
  • Accepted : 2019.02.18
  • Published : 2019.04.30
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Abstract

This study analyzes factors that affect the corporate value of Korean companies operating in Latin American countries. Primary factors are associated with characteristics of the host country, the parent company, and subsidiaries. Empirical results show that asset specificity is the main factor influencing firm value. This region is geographically far from Korea and culturally different. Therefore, the source of competitive advantage such as asset specificity should be large enough to offset liability of foreignness for successful entry into the region. This paper also found that joint ventures are more advantageous than direct investments. Joint ventures in Latin American can minimize risk, complement technology and information, and reduce trade barriers.

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