Locational determinants of Korean manufacturing investments in the European Union

This paper investigates the location selection decisions of Korean firms that established manufacturing operations in the European Union (EU) during the period 1986-1997. We assume that the major characteristics of each EU country are given and estimate the probability of selecting a particular country using a conditional logit model. The results suggest that Korean firms prefer to select a host country that has a large domestic market, low wage rates, a high level of inward foreign direct investment, a high level of Korean imports, and low interest rates.