Location Choices of Korean Multinationals in Europe

This paper aims to investigate what economic factors Korean firms consider when they select host countries in Europe. The empirical results demonstrate that chaebol firms and independent firms show different behaviors in selecting host countries. Compared to independent ones, chaebol firms consider a fewer number of economic factors and implement aggressive strategies by actively investing in countries that have not joined the EU or in which other Korean firms are less present. In contrast, independent firms tend to consider a wider range of economic factors and show more conservative behaviors by investing in major EU countries. It is also found that operational experience in the European market has more impacts on the location decisions of chaebol firms than independent ones.