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영어

This study analyzed the relationship between the internationalization of Korean manufacturing firms and their productivity and efficiency. Prior studies have examined the effect of internationalization on firm performance or differences in productivity and efficiency between exporting and non-exporting firms. This study aims to empirically analyze whether strengthening internationalization strategies is advantageous for increasing productivity and efficiency. The sample consists of 3,725 manufacturing firms (firm-year observations) listed on the Korean Composite Stock Price Index (KOSPI) market from 2003 to 2017. We measured internationalization as the ratio of foreign sales to total sales and productivity as net income per employee and added value per employee. This study adopted data envelopment analysis (DEA) to evaluate efficiency in firms' operating activities and calculated technical efficiency and pure technical efficiency using CCR and BCC models. Then we obtain scale efficiency by dividing technical efficiency by pure technical efficiency. The results of empirical analysis show a positive relationship between internationalization and productivity measured as net income per employee and added value per employee, supporting Hypothesis 1. Operating cash flow and debt ratio, which are control variables included in our empirical model, were estimated to be statistically significant negative. However, both firm size and foreign ownership were estimated to be a significant positive. In addition, as a result of estimating the relationship between internationalization, technical efficiency, pure technical efficiency, and scale efficiency, it was found that all of them had a statistically significant positive association, thereby supporting Hypothesis 2. The control variables, operating cash flow and debt ratio, were found to have a significant negative effect on technical efficiency and pure technical efficiency. In contrast, the firm size and foreign ownership had significant positive effects. There were some differences in the results of measuring efficiency as scale efficiency. Operating cash flow and firm size had significant negative effects on scale efficiency, but debt ratio and foreign ownership had no significant effect. Prior studies have presented evidence for differences in productivity and efficiency depending on whether or not they have entered overseas markets. This study expanded previous studies by providing empirical evidence that strengthening a firm's internationalization strategy improves productivity and efficiency. Domestic firms experienced many strategic changes as they experienced the 1997 Asia financial crisis and the 2008 global financial crisis. Before the crisis, firms sought profits by mass-producing low-priced products based on low wages, but after the crisis, they have made efforts to achieve growth by eliminating inefficiencies. Research has been conducted on productivity and efficiency improvement in response to this situation, and prior studies have analyzed whether domestic firms’ overseas expansion increases productivity and efficiency. Prior studies have explored the increase in productivity and efficiency due to exports. However, this study provided empirical evidence that strengthening firm's internationalization strategy is advantageous for increasing productivity and efficiency. This study has the following limitations. First, this study measured the level of internationalization as the ratio of FSTS, that is, foreign sales to total sales. Most of prior studies use FSTS as a substitute variable for the level of internationalization. To be robust, we can measure the level of internationalization by applying various measurements such as the number of foreign-invested countries and overseas subsidiaries. Second, our sample consisted of manufacturing firms. In the future, it may be possible to analyze whether the relationship between internationalization level, productivity, and efficiency varies from industry to industry.