• The Journal of Asian Finance, Economics and Business
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• v.7 no.1
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• pp.205-215
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• 2020

The purpose of this paper is to empirically analyze the determinants of foreign subsidiary's local embeddedness because it is critically important for the subsidiary to build a variegated local network. This paper suggests that a MNC's global capability, the degree of autonomy granted by the headquarters of the multinational corporation to its foreign subsidiary, the foreign subsidiary's absorptive capacity based on local environment, and its level of localization will affect the subsidiary's local network embeddedness. The empirical analysis confirmed that when the headquarters gives the foreign subsidiary more autonomy, this has a positive effect on the local embeddedness of the foreign subsidiary and when the foreign subsidiary has a strong absorptive capacity, this has a positive correlation with the local embeddedness of the foreign subsidiary. And this paper found that when the foreign subsidiary has achieved a high level of staff localization, this foreign subsidiary will have a higher level of local embeddedness. This study identified the preceding conditions necessary for a foreign subsidiary of a multinational corporation to effectively embed itself in the local network by analyzing factors related to the multinational corporation's headquarters and subsidiaries, and thus contributes significantly to continued research on the local embeddedness of subsidiaries.

• Journal of Korea Trade
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• v.25 no.2
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• pp.134-151
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• 2021

Purpose - This study empirically analyzes the impact of the internal and external network embeddedness of foreign subsidiaries and local market characteristics of the host country on the CEO selection whether or not to appoint an expatriate as the CEO of a foreign subsidiary. Design/methodology - To conduct an empirical analysis, we obtained a list of the headquarters of Korean MNCs from the Korea Chamber of Commerce and Industry. Based on the list of HQs, we identified a final list of overseas subsidiaries of Korean MNCs that have entered the world from KOTRA (Trade-Investment Promotion Agency for Korea). Then we conducted an empirical analysis based on the results of 391 questionnaires by employing logistic regression analysis. Findings - The results of empirical analysis are as follows. First, the higher the subsidiary's internal network embeddedness, the higher the tendency appoint an expatriate as the CEO. Second, the higher the volatility of the local market, the higher the tendency to appoint an expatriate as the CEO. Third, the stronger the competition in the local market, the lower the tendency to appoint a PCN. Originality/value - This study has significant theoretical implications in that it examines the link between the internal and external embeddedness of overseas subsidiaries and the appointment of parent country nationals (PCNs) as the CEO that prior research has not examined.

• Korea Trade Review
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• v.48 no.2
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• pp.1-26
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• 2023

The purpose of this study is to demonstrate how internal capability adjustments made by subsidiaries in response to local market adaption and market changes, together with the use of internal and external networks, have an impact on the investment performance of such subsidiaries. From the empirical results, it was proven that the larger the extent of internal capability adjustment made by subsidiaries, and the more quickly and flexibly it is implemented, the more positive the investment performance is. The empirical findings also showed that in this process, the use of internal/external network embeddedness has a positive mediating impact on the investment performance. Additionally, the results of statistical analysis support the research hypothesis that external embeddedness has a greater mediating influence on multinational manufacturing companies entering Chinese market than internal embeddedness. It implies to the top managers of subsidiaries that the subsidiary should actively utilize external embeddedness to create a new locational competitive advantage in the local region, as well as develop a strategy to reduce foreignness costs such as cost of adapting to the local system.

• Korean System Dynamics Review
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• v.7 no.2
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• pp.133-148
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• 2006

This study suggests a Causal Loop Diagram(CLD) of causality mechanism which are integrating matters of localization, networking, embeddedness & institutional thickness and collective learning. These five factors(localization, networking, embeddedness & institutional thickness, collective learning, innovative synergy) have been studied and proofed Also this study suggest a model of industry cluster based on holistic and global system thinking rather than local and linear thinking.

• Journal of the Korean association of regional geographers
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• v.13 no.1
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• pp.54-67
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• 2007

This paper aims to explore the characteristics of regional embeddedness of Korean firms in Daren City, China, with special reference to management practices. To achieve this goal, I attempt to analyze the type and structure of the firm, the structure of decision-making, labor practices, and the inter-organizational networks with the government, trade associations and the business supporting agencies. The major purpose of the investment in Daren by Korean firms is to penetrate and expand the local market. In line with this, the structure of decision-making by Korean firms tends to become increasingly autonomous, especially in terms of employment and marketing. However, the decision-making related to finance and accounting tends to be still highly controlled upon the headquarter in Korea. In addition, it is shown that Korean firms make a great effort to sustain the cooperative relationships with the local society and the local government.

• Journal of the Korean Geographical Society
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• v.29 no.2
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• pp.117-136
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• 1994

Contemporary global space economy is so dynamic that any one specific structural force can not explain the whole dynamic processes or trajectories of spatial industrial development. The major purpose of this paper is extending the traditional notion of industrial districts to functioning and development of new industrial districts with relation to the development of high technology industries. Several dynamic forces, which are dominated in new industrial districts in the modern space economy, are incorporated in the formation and dynamic aspects of new industrial districts. Even though key forces governing Marshallian industrial district are localization of small firms, division of labor between firms, constructive cooperation, and industrial atmosphere, Marshall points out a possibility of growing importance of large firms and non-local networks in the districts with changes of external environments. Some of Italian industrial districts can be regarded as Marshallian industrial districts in broader context, but the role of local authorities or institutions and local embeddedness seem to be more important in the Italian industrial districts. More critical implication form the review of Marshallian industrial districts and Italian industrial districts is that the industrial districts are not a static concept but a dynamic one: small firm based industrial districts can be regarded as only a specific feature evolved over time. Dynamic aspects of new industrial districts are resulting from coexistence of contrasting forces governing the functioning and formation of the districts in contemporary global space economy. The contrasting forces governing new industrial districts are coexistence of flexible and mass production systems, local and global networks, local and non-local embeddedness, and small and large firms. Because of these coexistence of contrasting forces, there are various types of new industrial districts. Nine types of industrial districts are identified based on local/non-local networks and intensity of networks in both suppliers and customers linkages. The different types of new industrial districts are described by differences in production systems, embeddedness, governance, cooperation and competition, and institutional factors. Out of nine types of industrial districts, four types - Marshallian; suppliers hub and spoke; customers hub and spoke; and satellite - are regarded as distinctive new industrial districts and four additional types - advanced hub and spoke types (suppliers and customers) and mature satellites (suppliers and customers) - can be evolved from the distinctive types and may be regarded as hybrid types. The last one - pioneering high technology industrial district - can be developed from the advanced hub and spoke types and this type is a most advanced modern industrial district in the era of globalization and high technology. The dynamic aspects of the districts are related with the coexistence of the contrasting forces in the contemporary global space economy. However, the development trajectory is not a natural one and not all the industrial districts can develop to the other hybrid types. Traditionally, localization of industries was developed by historical chances. In the process of high technology industrial development in contemporary global space economy, however, policy and strategies are critical for the formation and evolution of new industrial districts. It needs formation of supportive tissues of institutions for evolution of dyamic pattern of high technology related new industrial districts. Some of the original distinctive types of new industrial districts can not follow the path or trajectory suggested in this paper and may be declined without advancing, if there is no formation of supportive social structure or policy. Provision of information infrastructure and diffusion of an entrepreneurship through the positive supports of local government, public institutions, universities, trade associations and industry associations are important for the evolution of the dynamic new industrial districts. Reduction of sunk costs through the supports for training and retraining of skilled labor, the formation of flexible labor markets, and the establishment of cheap and available telecommunication networks is also regarded as a significant strategies for dynamic progress of new industrial districts in the era of high technology industrial development. In addition, development of intensive international networks in production, technology and information is important policy issue for formation and evolution of the new industrial districts which are related with high technology industrial development.

• International Area Studies Review
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• v.15 no.2
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• pp.275-301
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• 2011

This study examines antecedent factors that influence subsidiaries' MNC (multinational corporation) knowledge adoption. I argue that subsidiary local environmental factors(local embeddedness, level of local competition), subsidiary organizational factors(parent investment, subsidiary CEO expatriation, scope of subsidiary value chain), and subsidiary relational factors(subsidiary autonomy, the strength of subsidiary in MNC, social capital) are the important enablers for subsidiaries to adopt knowledge from other MNC units. Especially, I use two data set (knowledge from (1) peer subsidiaries, (2) parent company) to estimate the effect of the factors. The results indicate that subsidiary local embeddedness and scope of subsidiary value chain negatively influence on subsidiary knowledge adoption from peer subsidiaries. Conversely, the strength of subsidiary in MNC and social capital positively influence on that. Subsidiary knowledge adoption from parent company is positively influenced by parent investment and social capital.

• Korean Journal of Organic Agriculture
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• v.15 no.2
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• pp.131-150
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• 2007

This study explores the development process of an farmers' group in Asan City that now plays an important role in the development of organic farming of the region. While increase in income in general may be one of main purposes making farmers join or form a group, the farmers group in Asan, instead, has tried to form a cooperative of local organic farmers. In doing so, they experienced a lot of difficulties and leant by trial and error. As a result, the farmers' group has recently developed in terms of business and organisational growth. The growth is not merely due to the growth of organic food markets but also due to the strong internal ties and trust that made possible to expand into food processing as well as to do social and cultural activities fur the rural residents. It implies that trust and cooperative identity between farmers should be the most important thing to be locally embedded farmers groups in a specific region.

• Journal of the Economic Geographical Society of Korea
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• v.16 no.1
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• pp.37-49
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• 2013

This paper investigates social networks of high technology firms, located in a newly developed industrial area, called 'Daedeok Technovalley' in Daejeon, Korea. While the Vally was developed as an extension of Daedeok Science Park in Daejeon, it host 400 or so technology-intensive firms. A questionnaire survey was conducted to collect data on the firms of the Vally, during January 2010, and obtained 201 completed questionnaires. Additional data, such as sales amount and employment, were collected to measure the changes of firm size. This research analysed these data to argue that the enterprises have established some networks with local institutions; however, the networks do not significantly affect on the growth of the firms.

• Korea Trade Review
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• v.44 no.2
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• pp.221-237
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• 2019

Multinational corporations (MNCs) usually face indigenous business environments in host countries which are different from a home country's. In this circumstance, MNCs would accomplish low-investing performance if they pursuit the same as the home oriented business strategy in the host country. The more different kinds of specialized environments a host countries have, the more pressure of modifying the international strategy needed for MNCs. This paper examines that how a different market environment between a home country and a host country, through MNC's local responsive managements, can influence investing performance in a host country. This paper conducts structural equation analyses with collected empirical data focusing upon a MNC's market orientation efforts and the realization of management localization (i.e., increasing local sourcing intensity or local sales intensity) as mediators between the specialized environment in a host country and the MNC's investing performance. This paper has several contributions in developing the prior approaches: first, the market orientation variables are regarded not as normal independent factors but mediators; second, two step mediation model is examined to make link between host market's heterogeneity and MNC's performance.