Assessing nationalistic expressions of Korean companies: Korean FDI in Mexico
Juan Felipe Lopez-Aymes, Ph.D., El Colegio de Mexico, CEAA and Alejandra Salas-Porras, Ph.D., UNAM, FCPyS, Mexico
Published: Monday, October 20, 2008
The project investigates the characteristics of Korean investment in Mexico. It attempts to explore business practices of Korean companies and the weight Korean national identity has in competitiveness. It pays special attention to the linkages that Korean companies (commercial subsidiaries, affiliates, producers, or maquiladoras) maintain with their parent companies and/or with other Korean-origin firms. The investigation concentrates in two issues: the control and decision-making within the firm and the preference for doing business with Koreans.
The idea to study a Korean business community abroad and the nationalistic notions that may affect their business practices came about after realizing that most literature on Korean nationalism, especially the study of overseas Koreans, seldom considers this particular group of society. Numerous studies deal with the issue of economic nationalism and how business groups in Korea responded to the incentives and demands of government's development project. In different ways, the literature suggests that economic nationalism in Korea shapes corporate structures and practices, many of which remain features of the business environment within the country. However, it does not explicitly explore the idea that some of those practices may be reproduced outside Korea. In that sense, this project intends to elucidate if exclusivity practices -an effect of economic nationalism- are reproduced in other settings, if these are suitable for maintaining identity cohesion and strengthen efficiency and competitiveness. In other words, we ask if nationalism is compatible with global business practices and competitive strategies.
As the project and our ideas evolved, we found that to make the research feasible, we should explore what we called "expressions of nationalism". We set up three levels of expressions suitable to our purposes: ownership preferences (control and decision-making within the firm); production or business networks (structure of supply chains), and management organization (national origin of top-management). This research focuses not on the question of why Korean firms became internationalized but in more qualitative and subjective aspects, such as how they do so. In that sense, the objective is to find out if there is a style paradigm characteristic of Korean TNCs (transnational corporations) and the extent to which such style is shaped by clear expressions of Korean nationalism.
This paper is divided in five parts. The first part briefly describes the research strategy. The second part reviews the literature on three issues related to the research: TNCs from developing countries, current tensions between global and local imperatives, and Korean outward investment. The third part sets the background of Korean FDI in Mexico, using basic statistical data and a few references about Korean firms in Mexico. The fourth part examines the results of the fieldwork, summarizing our findings on the different issues covered by the interviews. The final part draws some preliminary conclusions based on the analysis of findings from field research.
Download File: SRG-Lopez-Aymes-and-Salas-Porras.pdf