Transnationalization and Localization Processes of Korean Small and Medium-sized Enterprises in Northern Vietnam

Authors: SEONGHUN KIM*, Seoul National University, Yangmi KOO, Seoul National University
Topics: Economic Geography, Business Geography, Asia
Keywords: Korean subconctracotrs, tncs, regional development, electronic industry, vietnam
Session Type: Paper
Day: 4/7/2019
Start / End Time: 9:55 AM / 11:35 AM
Room: Balcony A, Marriott, Mezzanine Level
Presentation File: No File Uploaded

The aim of this study is to find out transnationlization and localization processes of Korean Small and Medium-sized enterprises in electronic industry into northern Vietnam. Since Korean transnational enterprises set the biggest manufacturing plant in Vietnam in 2008, Korean SMEs as subcontractors to Korean TNCs also has invested into there. 21 in-depth interviews with Korean SMEs, TNCs, and Vietnamese workers are done for this study. Based on the framework from subcontracting theory and embeddedness in economic geography, researchers derived the characteristics of transnationalization and localization processes of Korean enterprises and the possibility of Vietnam's regional development induced by Korean enterprises. At first, researchers found out the reason why Korean SMEs invested into Vietnam, and how the inter-firm relationship between Korean TNCs and its subcontractors has been changed. In order to supplement the local supplier, Korean TNCs suggested their subcontractors to invest together into Vietnam and transplanted firm network in there. Secondly, researchers also found out how the localization process of Korean SMEs has been done in Vietnam, and how it affected the local Society in terms of making regional assets in Vietnam. Even though there is a pressure to localize firm activity from Vietnamese governments, there is huge different degree of localization in terms of human resources, material & sourcing, and R&D. The degree of localization of both Korean TNCs and SMEs' activities has been low except for labor. However, there is a possibility for Vietnam industry development by labor training, and spin out from Korean firms.

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