Publications
When Does Foreign Direct Investment Lead to Inclusive Growth? (with Jorge Martinez-Vazquez), The World Economy (2022)
In this paper, we examine the conditions under which FDI can lead to inclusive growth. While FDI is widely considered one of the most effective instruments for promoting economic development, there has not yet been a study that examines its effect on inclusive economic growth—that is, growth that benefits the poorest income groups. By using a three-way interaction and marginal effect analysis in a two-way fixed effects regression with cross-country panel data, I find that FDI has the most positive effect on inclusive growth when the host country has a sufficiently large manufacturing sector and infrastructure base. The results emphasize the critical importance of the host country’s absorptive capacity for FDI to lead to inclusive growth. A smaller technological or knowledge gap between the host country and foreign firms leads to more linkages and spillovers, ultimately improving the welfare of the poorest groups and creating jobs. The results emphasize the importance of host countries’ capability and policy orientation to build a certain level of economic structure and base to benefit from FDI, rather than relying on FDI as a standalone policy for inclusive growth.
The Effects of Korean Firm-specific Advantages on Foreign Subsidiary Performance: Moderating Effects of Host-location and Korean Chaebols (with Young-Ryeol Park and Yu-na Song), International Business Journal (2011)
In this paper, we study the effect of Korean multinational corporations' (MNCs) firm-specific advantages on the performance of their foreign subsidiaries. Korean MNCs overcame the 1997 Asian financial crisis through restructuring and have shown continuous improvement, reflected in the growth of Korea’s outward FDI, which persisted even after the 2008 subprime mortgage crisis. Most past studies focus on periods before the 1997 crisis, and there is limited research examining Korean MNCs’ firm-specific advantages (FSA) in their overseas operations. This paper analyzes the impact of Korean MNCs’ firm-specific advantages—namely technological knowledge, marketing knowledge, and international experience—on foreign subsidiary performance, as well as the moderating effects of host location (developed or less developed country) and Chaebol affiliation. The study uses firm-level panel data from 2000 to 2006, a period marking a notable increase in Korean FDI. The results indicate that technological knowledge positively impacts subsidiary performance, while marketing knowledge has a negative effect. Both host country location and Chaebol affiliation exhibit moderating effects. Additionally, we find a U-shaped relationship between international experience and subsidiary performance, which reflect initial high learning costs followed by increased absorptive capacity and profitability.
Working Papers
In this paper, I study the effect of manufacturing FDI on manufacturing employment in Sub-Saharan African (SSA) countries. In the first analysis, I use a three-way fixed effects regression with interactive fixed effects for country and year to observe the impact of manufacturing FDI on manufacturing employment and find a significantly positive effect. In the second analysis, I explore how the impact of manufacturing FDI on employment differs across industry sector groups by interacting manufacturing FDI with specific industry subgroups. The results show varying degrees of positive effects by industry subgroup and reflect both direct and indirect employment creation—via spillovers and forward and backward linkages. The evidence of indirect employment effects in this paper underscores the extensive impact of manufacturing FDI. The findings of this study suggest that attracting manufacturing FDI through targeted economic policies could play a pivotal role in addressing the challenges of SSA’s labor market. Increased flows of manufacturing FDI could also benefit SSA countries by contributing to industrial diversification and structural transformation.
In this paper, I replicate and extend Peet and Okeke’s 2019 study on the impact of obstetric care quality on the utilization of antenatal and delivery care in Nigeria. The data comes from the Better Obstetrics in Rural Nigeria (BORN) study, which measured obstetric care quality, availability, and birth outcomes in rural communities across 12 states representing Nigeria’s six geopolitical regions. The extended analysis offers insights into how women choose facilities based on various quality domains, cost perceptions, and perceived versus actual quality.
For antenatal care, structural and process-related qualities are important in facility choice, while process and outcome qualities are prioritized for delivery care. The findings also show considerable substitution effects: women from other public and private facilities tend to switch to primary health facilities when care quality improves. The coefficients indicate more substitution from public than private facilities, possibly due to the similar cost structures between public and primary health facilities. Additionally, a significant number of women who previously delivered at home opt for primary health facilities as perceived care quality rises. This suggests the potential for a substantial new user base at primary health facilities with quality enhancements. In addition, the stronger impact of perceived versus actual quality highlights the role of word-of-mouth and advertisement in women’s decision-making processes for obstetric care.
The Impact of Subsidiary Networks on Korean MNC's Foreign Expansion under Uncertainty (2010)
In this paper, I examine the effect of economic uncertainty on the expansion of Korean MNC’s subsidiaries. Now entering its fifth decade, Korean MNCs’ globalization efforts have been the subject of significant academic research. Previous studies have primarily focused on entry mode choices, motivations for overseas operations, and ownership advantages, which are associated with the early stages of globalization. However, with Korea’s rapid recovery after the 2008 subprime mortgage crisis, it is evident that Korean MNCs have transitioned into a new phase of globalization. This shift calls for updated research to better understand and support the ongoing development of Korean MNCs abroad.
Using the real options perspective in international strategy, this study investigates how exchange rate uncertainty affects the expansion of Korean MNCs' foreign subsidiaries, based on a sample of 150 publicly listed Korean firms and 346 foreign subsidiaries from 2000 to 2006. Subsidiary multinational network size and ownership type are included as moderating variables. The findings show that subsidiaries expanded during periods of economic uncertainty, with network size negatively moderating this effect. This suggests that Korean MNCs were able to recover swiftly after the subprime mortgage crisis due to the operational flexibility they had built by expanding during uncertain times. The negative moderating effect of network size likely reflects Korea’s unique context, particularly the influence of Chaebols. This study contributes to the real options perspective in international strategy and offers key insights for Korean MNCs' future foreign investment and operational strategies.
Work in Progress
When Does Fiscal Decentralization Lead to Inclusive Growth? (with Jorge Martinez-Vazquez and Kshitiz Shrestha)
Policy Reports
Economic Development Models for the City of Newburgh (with José Ramón Martí, Libby Lok, Ariel Sankar-Bergmann, and Kate Hamaji) (2013)
Impact Evaluation Proposal for a Micro Finance Company's Financial Education Program (with Jeff Meyer and Laine Rolong) (2012)