Abstract

http://ssrn.com/abstract=1344638
 
 

References (23)



 
 

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Agglomeration, Backward and Forward Linkages: Evidence from South Korean Investment in China


Peter Marcel Debaere


University of Virginia - Darden School of Business

Joonhyung Lee


University of Texas at Austin - Department of Economics

Myungho Paik


Northwestern University - School of Law

December 2008

CEPR Discussion Paper No. DP7079

Abstract:     
With a firm-level dataset, we study the location decision of all South Korean multinationals across China's regions between 1992 and 2004, taking into account spatial aspects. Our conditional logit estimates confirm previous studies that stress the agglomeration effects along industry and along national lines in firms' location choice. In particular, South Korean investors target the place where there are more firms irrespective of their nationality and, at the same time, more affiliates from South Korean multinationals. More importantly, we decompose these agglomeration effects into a pure agglomeration effect and an upstream and downstream (backward and forward) linkage effect. We find that the presence of upstream and downstream South Korean affiliates significantly increases the likelihood that a South Korean multinational invests there. At the same time, however, backward and forward linkages with the companies irrespective of their nationality do not seem to matter. As such, our analysis of investors' location choice brings together two perspectives: (backward and forward) linkages and agglomeration along national lines.

Number of Pages in PDF File: 35

Keywords: agglomeration, multinationals

JEL Classification: F1, F2

working papers series


Date posted: February 17, 2009  

Suggested Citation

Debaere, Peter Marcel and Lee, Joonhyung and Paik, Myungho, Agglomeration, Backward and Forward Linkages: Evidence from South Korean Investment in China (December 2008). CEPR Discussion Paper No. DP7079. Available at SSRN: http://ssrn.com/abstract=1344638

Contact Information

Peter Marcel Debaere (Contact Author)
University of Virginia (UVA) - Darden School of Business ( email )
P.O. Box 6550
Charlottesville, VA 22906-6550
United States
HOME PAGE: http://www.darden.virginia.edu/html/direc_detail.aspx?styleid=2&id=5794
Joonhyung Lee
University of Texas at Austin - Department of Economics ( email )
Austin, TX 78712
United States
Myungho Paik
Northwestern University - School of Law ( email )
375 E. Chicago Ave
Unit 1505
Chicago, IL 60611
United States
312-503-7029 (Phone)
312-503-5950 (Fax)

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