The Influences of Innovative Technology Competence in 4th Industrial Revolution on Exports of Korean Firms: Applying Gravity Factor Model in Firm-level OFDI
Sunghwan Kim, Yeon-Woo Do, Jin-Geun Hong · The Journal of International Trade & Commerce · 2019
Purpose - The purpose of this study was to investigate the effects of 4th Industrial Revolution technologies adopted by Korean firms on their exports in the global market Design/methodology/approach - This study collected 106,175 observations of 6,976 firms from the MDIS (Micro Data Integrated Service) by the Department of Statistics, specifically on the Survey of Corporate Activities together with the survey and financial data from 2006 till 2017. Using fixed effects panel models and PSM methods, this study introduces a revised gravity model on exports and OFDI. Findings - First, the technologies in the Fourth Industrial Revolution adopted by firms as a whole have a negative effect on their exports. Second, while the effect of width and level of applied technologies separately have a positive effect gradually changing from negative effect in their initial stage on their exports. Third, corporate outward direct investments, both overseas and domestic, have a negative effect on exports. Research implications or Originality - The findings reject many of those in prior studies by incorporating various gravity factors in the empirical models, such as the distance to the host country, its average tariff rate, foreign exchange rate, population, etc. pertaining to corporate OFDI decisions in addition to many corporate characteristic factors like firm size, ROA, shareholdings, etc, which is unique.