Korean Automotive Industries Impacts on the Local Labor Market in Alabama

• In Event: 571 - Section on Economic Sociology Roundtables (one-hour)
  In Refereed Roundtable: Table 11. Social Networks, Firms, and Investment

Abstract

Until recently, the vast majority of foreign direct investments (FDIs) have taken the form in which developed countries’ multinationals invest in other developed or developing countries. Following local economy growth in less developed regions, however, a large number of multinationals from middle-income or emerging economies also started searching for new markets overseas, which resulted in an increased share of South-North and South-South FDIs in world economy. Despite such changes in investment patterns, existing studies in multinational management literature primarily focus on the effects of North-North or North-South FDIs on FDI destinations. This study explores the effects of FDIs in reverse direction of those in previous research. As a case of up-market FDI from emerging economies (or middle-income countries), I take the example of Hyundai Motor, a Korean auto assembler, and its suppliers in Alabama and examine labor market changes driven by those firms. In doing so, I first describe the contexts in which Hyundai decided local production in the U.S. and the agglomeration patterns of Hyundai and its suppliers in Alabama. Then, using 2000 Census and 2012 American Community Survey (ACS 5-yr) data, I analyze demographic characteristics and labor market outcomes before/after Hyundai and its suppliers' migration to particular counties and compare them with the counterparts in non-invested areas. In a broad term, my research intends to investigate how emerging multinationals' investments affect labor market outcomes in FDI destinations, especially when those countries are more economically advanced.

Author

• Eunbi Kim, University of Pennsylvania