Foreign Direct Investment Spring 2009 Hwy-Chang Moon Professor of International Business & Strategy Graduate School of International Studies Seoul National University cmoon@snu.ac.kr Office: 614 & 615 Class Thu 9:00 – 12:00 (Room 101/140-1) Office Hours Tue & Thu: 1:20 - 2:20 pm or by Appointment

Course Description Globalization is very important in almost every field of business. In the past, international trade was the main tool of globalization. However, in today's business environment, foreign direct investment (FDI) is often more appropriate than international trade in achieving some strategic goals of firms and countries. This course will help class participants understand the key issues of FDI and formulate related strategies. The first part of the course deals with the basics of FDI: the strategic importance of FDI, its impacts on national economies, and related government policies. The second part of the course focuses on more in-depth analyses: the formal FDI models and their applications in the real world.

Course Materials Grading [total 100%] There is a reading packet of related articles and cases. Students should read the materials before class, so class meetings can be used for discussion rather than just for straight lecture. Grading [total 100%] Professional Behavior: attitude, attendance, participation (20%) One page summary of readings for each class (20%) Group Project: Oral presentation (20%) Individual Project: Written report (20%) Final Exam (20%)

Project Assignments Attendance There are two projects: a group presentation and an individual written report. Specific information about the projects will be given later. Students are expected to choose their own topics and group members. Assignments All assignments must be completed in the form of either Word or PowerPoint. No hand-written materials will be accepted. All assignments are due at the beginning of class on the due date. Any late submission, without a valid reason, will be penalized. Attendance Students must attend all classes in order to receive full attendance credit and will lose points for absences regardless of the reasons. Students who miss more than two classes may not receive a grade. Latecomers and those chatting with other people distract the class and may be penalized.

Class Schedule Part 1: Basics of FDI Class 1 (3/5) Introduction Preview of the course Important issues of FDI Class 2 (3/12) FDI as a Means of Global Strategy Globalization of a Firm Case Study: Bata Shoes (Film: One Man’s Multinational) One page c.v. with photo Five groups will be formed for group project and presentation of class articles Class 3 (3/19) FDI Impacts on Host and Home Countries [Group 1] Reich, 1990, Who is us? Harvard Business Review Reich, 1991, Who is them? Harvard Business Review UNCTAD, 2006, World Investment Report: Ch.5, Impact on Home and Host Developing Economies Class 4 (3/26) FDI Policies [Group 2] Kim & Moon, 2000, Contrasting models of corporations, Harvard Asia Pacific Review Moon & Bark, 2001, Asian economic crisis, FDI and stabilized economic growth, Journal of International Business and Economy Bark & Moon, 2007, The role of inward FDI: A case study of foreign firms in Korea, Routledge and UNCTAD Class 5 (4/2) Recent Trends of FDI [Group 3] UNCTAD, 2007, World Investment Report: Overview UNCTAD, 2008, World Investment Report: Overview

Class 6 (4/9) Investment Promotion Agencies (IPAs) [Group 4] Western Cases: USA, U.K., Ireland, the Netherlands, Denmark, France Asian Cases: China, Japan, Singapore, Dubai, Hong Kong, Korea Class 7 (4/16) Regional or Global? [Group 5] Rugman and Verbeke, 2004, A perspective on regional and global strategies of multinational enterprises, Journal of International Business Studies Ghemawat, 2005, Regional strategies for global leadership, Harvard Business Review Project: One-page executive summary for each group Part 2: Formal FDI Models and Their Applications Class 8 (4/23) Conventional Perspective [Group 1] Moon, 2004, The evolution of theories of foreign direct investment, Review of Business History Dunning, 2000, The eclectic paradigm as an envelope for economic and business theories of MNE activity, International Business Review UNCTAD, 2006, World Investment Report: Ch 4, Drivers and determinants Class 9 (4/30) New Perspective [Group 2] Moon & Roehl, 2001, Unconventional FDI and the imbalance theory, International Business Review Moon, 2004, A formal modeling of the imbalance theory to explain two directions of foreign direct investment, Journal of International Business and Economy Moon, 2007, Outward foreign direct investment by enterprises from the Republic of Korea, in Global Players from Emerging Markets: Strengthen Enterprise Competitiveness through Outward Investment, UNCTAD, New York and Geneva: United Nations.

Class 10 (5/7) Real World Evidences [Group 3] Tschoegl, 2002, FDI and internationalization: Evidence from U.S. subsidiaries of foreign banks, Journal of International Business Studies Ivarsson & Jonsson, 2003, Local technological competence and asset-seeking FDI: an empirical study of manufacturing and wholesale affiliates in Sweden, International Business Review Moon & Yin, Working Paper, New patterns of Chinese outward foreign direct investment: An organizing framework and empirical investigation. Class 11 (5/14) Global Strategy & Entry Modes [Group 4] Farrell, 2004, Beyond offshoring: Assess your company’s global potential, Harvard Business Review Moon, 1997, Choice of entry modes and theories of FDI, Journal of Global Marketing Class 12 (5/21) Cooperation through FDI [Group 5] Ramamurti & Doh, 2004, Rethinking foreign infrastructure investment in developing countries, Journal of World Business. Moon, 2005, Economic cooperation between Vietnam and Korea through FDI, Review of Southeast Asian Business. Class 13 (5/28) Special Topic Catch-up and/or Special Lecture Class 14 (6/4) Group Project Presentation (PPT file) & discussion Class 15 (6/11) Final Exam Closed book/notes Individual Project due: Hard copy & e-mail (“e-mail title: 2009FDI-your name”)

One-Page Summary and Evaluation Your name Class number (e.g. Class 01) Article author & name Summary of the article(s) Uniqueness Main points Evaluation Constructive evaluation Possible extension

Group Project Topic Size Grading Schedule Anything related to the topic of this course Theoretical and practical Size 5 groups Make your own group Grading Group grade Intra-group grade (to be asked in the exam) Schedule Class 07 (4/16): One-page executive summary Class 14 (6/04): Presentation

Presentation of Class Articles Topics Assigned by the group in the syllabus Content for Presentation Content of the article(s) Other related information Use tables, figures, and analytical models Schedule Presentation during class time Handouts

Individual Project 10 ~ 15 pages, single spaced Including the title page, references, tables and figures An abstract of 100-150 words, followed by 3-6 key words MS Word, Times New Roman 12 points A4-sized paper with 1-inch margins

Research Format Introduction Literature Review The importance of your topic Literature Review Related existing studies Academic articles, books, reports, periodicals, etc. Criticism and Improvement Criticism on existing studies Possible extensions Your Study New model Rigorous analysis Conclusions Theoretical and practical implications Further studies